ENTREPRENEURIAL OPERATIONS
PRODUCTION PLANNING AND CONTROL
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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backlog
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backorder
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independent
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order qualifier
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Detailed explanation-1: -Backorder Example The examples of backorder are as follows: Mr. A purchases ten buses from the dealer, but the dealer only has four buses in inventory, which he can deliver, and for the remaining six buses, Mr. A has to wait for 7 to 8 months as it takes the dealer 7 to 8 months to get it from the supplier.
Detailed explanation-2: -What does backorder mean? Backorder or back order refers to items that are out-of-stock but will be back in stock be soon. A product on backorder is already planned by the manufacturer but has not been produced yet, and will be next on the list for delivery when it is back in stock.
Detailed explanation-3: -What Are Backorder Costs? Backorder costs include costs incurred by a business when it is unable to immediately fill an order and promises the customer that it will be completed with a later delivery date. Backorder costs can be direct, indirect, or ambiguously estimated.