What characterizes a standing order?

A standing order is characterized by the delivery of specific amounts of goods or services on a regular basis. It typically involves a long-term supplier relationship where the buyer agrees to receive a predetermined quantity of products at set intervals, which can help ensure consistent availability of items while potentially stabilizing costs. This arrangement can enhance supply chain efficiency and streamline inventory management, allowing organizations to maintain appropriate stock levels without the need for frequent reordering.

In contrast, a one-time purchase agreement signifies a unique transaction and does not provide for ongoing deliveries. An informal supplier agreement lacks the structure and regularity inherent in a standing order, while a commitment to buy only when needed involves reactive purchasing rather than proactive management of supply, which does not align with the regular delivery characteristic of a standing order. Therefore, the option highlighting regular delivery aligns precisely with the definition of a standing order.