Click the Add'l Stocking Fields hyperlink to access this field on the Stocking tab of Inventory Maintenance. This field only applies to the Primary Vendor, and only if option 3047 "Use item level PO Backorder flag in Purchasing & Receiving" is set to Y in Options Configuration.
Typically, you will only set this field to Y for items that are special orders/special buys. In fact, rather than setting this field to Y, you may prefer using the corresponding "Backorder" field in Purchasing and Receiving so that you can designate backorder items on a case-by-case basis when you have worked out an exception with a vendor on a particular PO.
Blank = Follow Vendor's Backorder Flag (default)
N = Never allow backorders for this item from this vendor
Y = Always allow backorders for this item from this vendor. For example, this item is a special order/special buy type of SKU.