Certified Supply Chain Professional (CSCP) Practice Exam

What defines a backorder?

1. An unfilled customer order

2. A surplus of inventory

3. A type of order cancellation

4. A special promotional order

The correct answer is: An unfilled customer order

A backorder is defined as an unfilled customer order that cannot be fulfilled due to insufficient inventory on hand at the time of the order. When customers place orders for products that are not currently available, these orders are placed on backorder. This is a common occurrence in supply chain management, especially when demand exceeds the available supply or when there are delays in the replenishment process. The backorder system allows businesses to continue selling items even when they are temporarily out of stock, ensuring that customer needs are eventually met once the inventory is restocked. In contrast, the other options describe different scenarios that do not accurately reflect the nature of a backorder. A surplus of inventory refers to having more stock than is needed, which is the opposite of a backorder situation. A type of order cancellation implies that an order has been completely withdrawn and will not be fulfilled, negating the concept of awaiting fulfillment. A special promotional order may refer to a specific campaign or discount-related order but does not define a backorder either. Thus, the defining characteristic of a backorder is its direct connection to customer orders that remain unfulfilled due to lack of stock.