Types of orders

economic-dictionary

The types of orders are the different forms of request for the purchase of materials or services that a company makes to its suppliers.

It is important to say that the request for orders is made by the purchasing department of a company. These orders are formulated in accordance with the requirements for materials and services made by the production or warehouse departments.

For its part, the production department makes these requirements considering that the organization has the supply of those goods and services that will be necessary to carry out the production process.

Meanwhile, the warehouse or warehouse department does it to have the necessary availability of products. This, to meet the requests of customers who buy the products that the company sells.

Types of orders

There are different classifications of orders, among the most important we can mention the following:

1. By the conditions established between the parties

According to the conditions established between the parties, the orders can be classified into:

to. Conditional order

Of course, the conditional order is a type of order whose fulfillment is restricted by a set of commercial conditions that the buyer requires from the seller. These conditions could be some benefits such as discounts, payment methods, delivery times and conditions on the future of the demand.

Therefore, the fulfillment of the deal will depend on the acceptance of the conditions of the contract by the seller. That is, this order form is called an order proposal.

b. Firm order

This type of order occurs when the buyer and the seller agree on all the established conditions. It does not require any type of negotiation or modification to be made for compliance. This, given that all the conditions have been previously established and the corresponding contract has been signed. The document is already an order note.

2. By the requested object

According to the requested object, the orders can be:

to. Request for services

Naturally, it is the formal request for the provision of a service or a task by a client. This feature may or may not include the materials needed to carry out the task. If you do not include the materials, the order requester is responsible for the cost of the materials.

b. Materials Order

The order of materials is used by companies that require certain products or materials to perform their tasks and be able to function. They can be factories that transform materials into products or distribution companies that sell products. That is, the materials can be used to be consumed or to replenish stock of products.

3. By the destination of the material

Depending on the destination of the requested material, the orders can be:

to. Replacement order

Undoubtedly, replenishment orders are requested by a company's warehouse or warehouse department. These requirements are made in order to maintain the minimum amount of stock that the company needs. This, in order to efficiently meet the routine requirements of the company's internal or external customers.

b. Extraordinary consumer request

An extraordinary order can be generated when the company has an adequate level of supply of these materials in its storage process. But, as the company expects greater consumption or greater demand, it places extraordinary orders. In this way, it manages to comply by adequately meeting market demands.

4. By the order form

Regarding the form, the orders are classified as:

to. Normal order

Obviously, a normal order is placed in the usual way to cover the supply for short periods of time. This time can be from a week, a month or attending a specific season. Generally, these orders are made in accordance with the supply policies applied by the companies. That is, they respond to the normal supply that the organization requires.

b. Scheduled order

On the other hand, the scheduled order is made based on the company's historical purchase data, considering regular periods to place the orders. In this way, management and material acquisition costs are reduced. This is because the company, when scheduling its orders, buys in large volumes.

Of course, this type of order needs a control of the dates established for deliveries, since a failure in the dispatches could affect the amount of stock needed.

c. Open order

A blanket order occurs when there is a commitment to purchase materials and products in large volumes. But deliveries are made in smaller quantities by spacing delivery times. These orders can handle approximate quantities, which are acquired gradually.

Order types

How can you formalize any type of order?

Orders must be formalized for compliance to be effective. The most common ways to confirm an order are as follows:

1. Using the phone

First of all, the confirmation of an order can be done by means of telephone communication. But for the order to be formalized, it is convenient to use a written document, after making the confirmation by phone.

2. Using written means of communication

Second, using the written media. The most common forms of written communication are letters, fax, and email. Written forms have the advantage that all conditions are formally established between buyers and sellers.

3. Order note

Third, an order note is a printed document that contains the most important data to facilitate the entry of information and speed up the process. That makes the buying and selling process easier.

4. Through a commercial agent

Also, the order can be formalized when the commercial agent delivers the order form and then it is signed for fulfillment.

Types of orders
How are they formalized?

In conclusion, it can be said that there are different types of orders. These are tailored to the specific needs and requirements of each company. Now, what should be clear is that, regardless of the type of order that is used, the order must clearly include all the conditions of sale that are important to the company.

These conditions such as prices, discounts, delivery dates, quality, and any other that may be of interest, must be established as precisely as possible. This, in order not to give rise to different interpretations.

Tags:  culture Colombia Business 

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