Blanket PO

In practice

Blanket terms should state release lead time, the finished goods and raw material the supplier may hold, and liability for that inventory if the program ends.

Related terms

EAU

EAU is estimated annual usage, the number of parts a buyer expects to order in a year. Suppliers use EAU to choose the process, tooling, cavity count, and material buys, so it moves the quote more than almost any other RFQ field. Overstated EAUs lead to overbuilt tooling and disputes.

Safety stock

Safety stock is extra inventory held above expected demand to cover supplier delays, quality holds, and demand spikes. It is often set in weeks of usage. Longer or less predictable supply chains, including most offshore sources, need more safety stock, which adds carrying cost.

MOQ

MOQ is minimum order quantity, the smallest run a supplier will accept for a part. It is set by setup time, material minimums such as a full coil or bag of resin, and finishing lot charges. Below the MOQ, the piece price rises steeply or the supplier declines the order.