What defines a blanket order?

A blanket order is defined as a long-term commitment to a single supplier where the buyer agrees to purchase a specified quantity of goods or services over a set timeframe at agreed-upon prices. This type of agreement allows for streamlined purchasing since it secures pricing and availability in advance, which can enhance supplier relationships and simplify the ordering process. Companies often use blanket orders to cover ongoing needs without having to place individual orders each time, thus improving efficiency and potentially reducing administrative costs.

The concept of a blanket order contrasts with options like a specific purchase order for immediate delivery or a one-time purchase agreement, both of which involve single transactions rather than a long-term arrangement. Similarly, an order requiring immediate payment does not accurately reflect the nature of a blanket order, which usually involves terms that allow for payment over time as goods or services are delivered.