When processing an internal replenishment order or a usage order, there may not always be enough inventory available at your warehouse to fill an order. When an order cannot be filled completely due to a temporary shortage of stock items, the system automatically backorders the items. The backordered quantity is the quantity of items that could not be allocated to the order because of the shortage.

                            Backordered Quantity = On-order Quantity - Allocated Quantity

Therefore, the order is only partially allocated. Partially allocated orders have a header with an allocation status of A for partial allocation and at least one line with an allocation status of A for partial allocation. Allocation status of an order header and order lines can be viewed on the Order Requirements Inquiry (ORI) screen.

When a backorder occurs with a usage order or an internal replenishment order, the backordered items and quantities appear on the Allocation Exception Report (RAEXP). The Allocation Exception Report (RAEXP) is generated automatically each day and is used to determine the items and quantities that have been backordered. This report also provides other warehouse locations that have the items in stock in case there is an urgent need.

The Allocation Exception Report is located in RMDS in the report group IN 260-4. The report ID is RAEXP. For more information on accessing RMDS reports, refer to Viewing and Printing RMDS Reports Step-by-Step.

There are two ways in which backorders can be handled:

• Orders can be closed without shipping the backordered quantity. This can only occur when:
• The order has a status of 5 for partial allocation, and the shipped quantities all equal the allocated quantities. In other words, all of the items that were allocated to the order have been picked, posted and shipped.
• The order has a status of 4 for released, and all lines have an allocated quantity of zero. In other words, no inventory has been allocated to any line of this order because no items were available at the warehouse.
Closing the order without issuing the backordered quantity cancels the backorder. If the customer still needs the items that were backordered, a new order must be submitted.
 
• If the order is left open, backorders can be maintained at the warehouse and processed again when inventory is available. In other words, the backordered quantity will be automatically released again and automatically reallocated when enough nventory is available to fill at least a partial quantity of one line of the order. Once all backordered lines have been allocated and shipped, the order can be closed.

Note: For a backorder to be processed, the order must have a header status of 4 for released or 5 for partially allocated. The order also must have a header with an allocation status of A for partial allocation and at least one line with an allocation status of A for partial allocation.

Reallocation occurs during production when the backordered reallocation job is run. The backordered job is run every night automatically. Once an order is reallocated, it is then processed like a normal order. A pick list is generated, and the warehouse must pick, post and ship the order.