What does the term "backorder" indicate?

The term "backorder" indicates items that are temporarily out of stock but can still be ordered. This means that while the specific items are unavailable for immediate shipment, the supplier anticipates receiving more inventory in the near future, allowing customers to place orders for those items. Once the stock is replenished, the orders can be fulfilled.

This understanding highlights the nature of backorders as a temporary situation rather than a permanent one (which would pertain to discontinued products) or a scenario where items are consistently available (which would refer to stock on hand). Additionally, it emphasizes that backordered items are generated from demand and future supply processes rather than featuring overstocked inventories, which involves excess stock rather than unavailable stock.