The average units of demands that are waiting to be filled at any point of time in an optimization interval. It is a function of pipeline forecast, pipeline forecast variance and stock level, and is a statistical expected value of the stockout amount when demands exceed the stock level. For a given pipeline forecast and variance, the higher the stock level, the lower the expected backorders. The Total
EBO is directly related to the Wait Time where EBO is
Wait Time * Total Daily Forecast.