Blanket Order Discounts (BO)
A blanket PO, or purchase order, allows you to purchase goods or services at the most economical price level over a set period of time and for a set amount of time. A blanket PO adds certainty to a business. There are many advantages to blanket orders.
Inventory
The BO makes it easier for the buyer to calculate proper inventory levels and know when it is time to reorder supplies. The BO enables a buyer to better control costs by instituting cost-saving measures.
Cost Savings
With a stable (resin +/- impact?) price for a fixed period of time, the PO serves as a hedge against inflation. The most economical price level offers savings over traditional bracket pricing
Certainty
Businesses like certainty. With a blanket PO, there is certainty for both the supplier and vendor regarding the cost of the goods or services. Both sides have certainty concerning quantity, price, delivery requirements and payment terms.
The Purchasing Process
This reduces time spent on repetitive orders and allows buyers to concentrate on other tasks. During the process, vendors may offer substitute items that might be better than the original.
See also
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