What is Shortages and Backorders

The request for material from inventory which can not be met on demand is known as shortage. We can treat these shortages in one of the two ways. First; we can record the unsatisfied demands, as backorders, separately from normal demand and deliver requested material to the customer where the shipment arrives from the supplier. Alternatively, we can fail to record unsatisfied demands and force the customer to go elsewhere for the material or to make a new request for material either on a specified date or when he expect additional material will have come into stock. These treatments are often called the fill or kill method. Sometimes the method of handling unsatisfied demands will be determined by the customer.

Inventory Models for Deteriorating Items

Vinod Kumar Mishra (B.T. Kumaon Institute of Technology, India)