What is a blanket order?

A blanket order is specifically designed as a long-term purchase commitment with a supplier. This arrangement allows organizations to procure products or services over a specified period while maintaining the flexibility to release small orders as needed. Essentially, it entails pre-negotiating prices and terms with a supplier for items, enabling the buyer to take advantage of favorable pricing and secure supply without the constant need to issue separate purchase orders for each delivery.

This approach is particularly beneficial in managing inventory and ensuring a steady flow of required items, while also allowing for adjustments based on immediate needs through short-term releases. These characteristics define the structure and purpose of blanket orders, distinguishing them from less strategic approaches to procurement.

Other options reflect different order types or purposes, emphasizing the unique advantages of blanket orders in terms of commitment and flexibility in purchasing.