Back to Glossary

Backorder Time

The time between the origin of demand and its satisfaction is backorder time. Technically, the backorder time is the number of backorders divided by demand. But this includes all demand, even demand that is not backordered. Of more interest is the backorder time when orders are backordered. This is given by:

Where fill rate is the probability that an order is not backordered. Fill rate is also known as service level.

© 2024 Project Production Institute. All Rights Reserved.