What does a standing order specify?

A standing order is a long-term agreement between a buyer and a supplier for the purchase of goods at predetermined intervals. The key characteristic of a standing order is that it typically includes all the essential terms of the agreement but focuses primarily on the repeated nature of the deliveries rather than specifying a single bulk quantity.

Choosing the alternative that states it specifies all terms except the quantity captures this dynamic accurately. In a standing order, the quantity may fluctuate based on need while the other terms—such as pricing, payment terms, delivery locations, and conditions of the supply—remain constant. This flexibility allows businesses to maintain regular inventory levels without having to negotiate the larger umbrella terms repeatedly.

The other options do not capture the essence of what a standing order is designed to achieve. For example, specifying only the quantity would be too limiting; a standing order is broader in its scope. Similarly, stating all terms including pricing and delivery dates could misrepresent the flexibility inherent in standing orders, which adapt the quantity based on need. Lastly, focusing solely on the delivery schedule does not encompass the overall agreement's broader aspects, such as pricing or payment terms.

Understanding standing orders is essential for effective contract and inventory management, as they facilitate smoother operations while maintaining a consistent supply chain.