What is blanket purchase order in SAP MM - Materials Management?

SAP Term: blanket purchase order

• Component: MM

• Component Name: Materials Management

• Description: A purchase order with a validity period and value limits for the simplified procurement of materials or services. A longer-term blanket purchase order enables you to procure different materials or services from a vendor up to a specified maximum value. The nature of the materials or services is such that the cost and administrative effort involved in processing individual purchase orders are too high in relation to their value. A blanket purchase order contains only a short text and a validity period. It does not contain specific materials or services. Blanket purchase orders have the item category B and document type FO. You do not need to know the account assignment for the individual materials or services required at the time of ordering. This can be entered during the invoice verification process. If you enter account assignment data in the purchase order, you can change it at the time of invoice verification. For example, you can change single account assignment to multiple acc

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• Key Concepts: 
  A blanket purchase order (BPO) is a type of purchase order used in SAP Materials Management (MM). It is a long-term agreement between a buyer and a vendor that allows the buyer to purchase goods or services from the vendor at predetermined prices over a specified period of time. The BPO is used to streamline the purchasing process and reduce administrative costs. 
  
  How to use it: 
  In SAP MM, the BPO is created by entering the vendor, material, quantity, and price information into the system. Once the BPO is created, it can be used to place orders with the vendor. The BPO can also be used to track the status of orders and monitor delivery dates. 
  
  Tips & Tricks: 
  When creating a BPO, it is important to ensure that all of the necessary information is entered correctly. This includes the vendor, material, quantity, and price information. Additionally, it is important to review the terms and conditions of the BPO before submitting it for approval. 
  
  Related Information: 
  The BPO can be used in conjunction with other purchasing documents such as purchase requisitions and purchase orders. Additionally, it can be used in conjunction with other SAP modules such as Inventory Management (IM) and Warehouse Management (WM).