ABSTRACT
If the demand is not fulfilled completely now, the shortfall may be backordered in the manufacturing concern. This leads to backorders in the system and should be understood in the context of manufacturing entrepreneurship. The shortages which are backordered can also be included for the analysis of maximum inventory level under such a scenario. With an increase in the backordering cost, the variation in maximum inventory level is illustrated with an example in this chapter. If the backordering cost increases in the industrial/business environment, the entrepreneurial manager has one of the options in terms of the reduction in facility setup cost along with the appropriate quantification, helpful in the analysis of the situation encountered because of one or other problem being faced.
