Free Backorder Calculator
Backorder cost & quantity formula
Calculate how many units are on backorder and the total backorder cost when customer demand exceeds available stock. Includes optional lost sales cost estimate.
Optional
Profit lost when customers cancel instead of waiting
Backorder Qty = Customer Demand − Available Stock (if Demand > Stock)
Backorder Cost = Backorder Qty × Cost per Unit per Day × Lead Time Days
Lost Sales Cost = Backorder Qty × Lost Sale Cost per Unit
What Is a Backorder Calculator?
A backorder calculator helps you quantify the financial impact of a stockout. When customer demand exceeds your available inventory, the shortfall goes on backorder — the customer waits while you restock. This calculator computes the backorder quantity, the total cost of managing those backorders during the lead time, and optionally the lost sales cost from customers who cancel rather than wait. Use this data to decide whether holding more safety stock is justified.
How to Calculate Backorder Cost in 3 Steps
Step 1 — Enter Demand and Stock
Enter the total customer demand (units ordered) and the current available stock. The calculator will determine how many units need to be placed on backorder.
Step 2 — Enter Backorder Cost and Lead Time
Enter the cost to hold a backorder per unit per day (admin costs, penalty fees, customer service overhead) and the expected lead time until you can restock.
Step 3 — Optionally Add Lost Sale Cost
If some customers cancel rather than wait, enter the lost sale cost per unit (the profit margin lost). The calculator will show the combined cost of backorders and lost sales.
Who Uses This Backorder Calculator?
Retail & E-commerce Businesses
Quantify the financial cost of stockouts to justify investing in more safety stock or faster replenishment cycles.
Inventory Planners
Model the cost of backorders versus the cost of holding extra stock to find the optimal inventory level.
Customer Service Teams
Estimate the total customer impact of a stockout event and prioritise which backorders to fulfil first.
Supply Chain Managers
Report the financial cost of backorders to leadership and justify supply chain improvements.
Frequently Asked Questions
What is a backorder?
A backorder occurs when customer demand exceeds available stock. The customer has placed an order but the item cannot be fulfilled immediately — they are willing to wait until stock is replenished. The seller must manage the backorder until the new shipment arrives.
How is backorder quantity calculated?
Backorder Quantity = Customer Demand − Available Stock (only when demand exceeds stock). If you have 350 units in stock but demand is 500 units, the backorder quantity is 150 units.
What is backorder cost?
Backorder cost includes the administrative cost of managing the order, potential penalty clauses with customers, customer service overhead, and the risk of the customer cancelling. It is typically expressed as a cost per unit per day until the order is fulfilled.
What is the difference between backorder and lost sale?
In a backorder, the customer waits for the item to come back in stock. In a lost sale, the customer cancels and buys elsewhere. Lost sales are generally more costly because you lose the entire sale revenue and potentially the customer's future business.
How can I reduce backorder costs?
Hold adequate safety stock for high-demand SKUs, use reorder points and automated replenishment, shorten supplier lead times, and maintain backup suppliers for critical items.
Is this backorder calculator free?
Yes, completely free with no account or login required.