📦 Backorder Rate

Backorder Rate#

The share of orders that cannot be filled immediately from stock.

Important

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What it is#

Backorder Rate is a supply-chain KPI measuring the proportion of customer demand that cannot be filled immediately and must be placed on backorder — delayed fulfillment, not necessarily lost. A high rate points to frequent shortages and weak planning; a low one to efficient inventory and satisfied customers.

The formula#

It is computed by units or by orders,

\[\text{Backorder Rate} = \frac{\text{Backordered Units}}{\text{Total Units Ordered}} \times 100\%,\]

or, order-based, orders containing backordered items divided by total orders.

A worked example#

Of 1,000 units ordered in a month, 920 ship immediately and 80 are backordered, giving 80 / 1,000 = 8% of demand delayed.

Where it sits#

Backorder rate shapes customer experience, revenue (some backorders convert later, some cancel), forecasting accuracy and supply-chain health, and it falls with better forecasting (ARIMA, Prophet, LSTM), proper safety stock, reliable suppliers and ABC segmentation. In one full snapshot — 920 shipped, 50 backordered then filled, 30 cancelled — the fill rate is 92%, the backorder rate 5%, the stockout rate 3%, and those 30 cancellations become lost sales value.

Theme: Operations & Supply Chain · All terminology

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Mind map — connected ideas

Fill Rate · Stockout Rate · Lost Sales Value · Safety Stock · Ops Health Dashboard · SLA (Service Level Agreement)

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More in Operations & Supply Chain

Crew Overtime · Demand Forecasting · Fill Rate · Long Lead Times · Long-Tail Items · Lost Sales Value · Overstock % · Real-Time Inventory Tracking · Reorder Point (ROP) Optimization · Safety Stock · SKU · Slow-Moving SKUs · Stockout Rate · Stockouts