What Are Blanket Purchase Agreements

For example, they can only keep 20% in stock for the first 6 months, so both the supplier and the buyer are able to check the quantity and adjust it accordingly. This reduces the supplier`s stock load during the contract period and can help the buyer at the end of the contract if the inventory does not move as quickly as expected. The contract can be renewed year after year, but can be adjusted each time, as a more relevant forecast history predicts the need to reduce or increase inventory demand. Alternatively, some companies may use predicted information on a material requirements planning system to determine appropriate inventory quantities throughout the product lifecycle. Suppliers, in turn, can submit multiple invoices showing the same BPO number.

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