When the quantity ordered by the customer is not totally confirmed ,or

when the Requested date can not be kept keeping the present scenario in mind, then we go for "Back order"
processing.
Suppose, you have only 1000 units in stock of your material M1 with you, out of which say 900 units you have already
confirm or allocated/promised to your different customers.
So ,you have only 100 units left with you to serve any new order.
You are sure that before 1st of next month ,i.e after your sales closing on 30th Sept only you will get new stocks.
Suppose in this scenario, one of your most important customer in term of business ,payment etc, has dropped in with
an order of 250 units which he needs within suppose 30th of this month, then what you will do ?
Since last few months you were waiting for his order, but now when you received it , you are not in a position to
confirm his order keeping the present scenario in mind.
But as a businessman, I can not miss the customer as he is the most important customer for me.
So, I will take out some quantity from the quantiy already promised to different customer to meet his requirement of
250 units and this "Back order processing".
So, you can say , Backorder processing is simply doing manipulation.
Backorder can be done in two ways
1. Manual The various orders are listed amnually as per confirmation and promised quantities(ATP) are reassigned.
2.Automatic/via resheduling System does automatically taking the delivery priority field into consideration.

 Share