About back to back order

Summary:
Could anyone explain what is back to back order with example?

Content (please ensure you mask any confidential information):

Hello.

I have some questions related to Back to Back Order.
In my understanding, it's one of fulfillment technique.

For example. When we received order for item AAA from customer, then we ask our supplier to supply the item AAA to our warehouse.

Once our warehouse receive item AAA, we can ship it to customer from our warehouse.

Is my understanding correct? If so, what kind of advantage are in this fulfillment process?

Thank you in advance.

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