What type of order refers to a long-term purchasing commitment to a supplier?

A blanket order is a type of procurement method that establishes a long-term purchasing commitment with a supplier, allowing for streamlined ordering and potentially better pricing. This arrangement is beneficial for both the buyer and supplier, as it provides the supplier with a predictable demand and helps the buyer secure supply and potentially more favorable pricing over time.

In a blanket order, the buyer agrees to purchase a specified quantity of goods or services within a certain timeframe under predetermined terms and conditions. This order type facilitates easier reordering and can reduce administrative costs associated with frequent order placements.

Other options, while related to supply chain and inventory management practices, do not represent long-term purchasing commitments. For instance, drop shipping involves a retailer taking orders without holding inventory, relying on a supplier to ship products directly to customers. Vendor-managed inventory focuses on the supplier managing the inventory at the buyer's site but does not necessarily involve a long-term purchasing commitment. Finally, a forecast order is typically based on predicted demand over a short period and does not establish a long-term relationship with a supplier. Thus, the blanket order stands out as the correct choice in terms of long-term commitments in purchasing.