Blanket order definition

A blanket order is a purchase agreement that outlines the details for repetitive purchases from a vendor over an agreed time period. A blanket order will generally specify the supplier and customer, the products and/or services, the delivery schedule, the pricing, quantities and other terms and conditions.

A blanket order may specify a set quantity to be delivered on a specific schedule or it may be on-demand where deliveries are to be made at the periodic request of the customer.

A blanket order simplifies purchasing because it reduces the number of purchase orders that are required (one to start) and serves to stabilize supply. Suppliers like blanket orders because they tend to stabilize sales and inventories and simplify the selling process. They work as a cost reduction and profit improvement tool for both suppliers and customers.

A blanket order typically does not establish an exclusive relationship, as a customer may have a number of blanket orders within a product group.