Safety stock

Related terms

Blanket PO

A blanket PO is a purchase order that commits to a total quantity or dollar amount over a set period, usually 12 months, with releases issued against it as parts are needed. It gives the supplier volume visibility for material buys and gives the buyer fixed pricing.

Landed cost

Landed cost is the total cost of a part delivered to the buyer's dock, including piece price, tooling amortization, packaging, freight, insurance, duties, tariffs, brokerage, and inventory carrying cost. Comparing offshore and domestic quotes on piece price alone understates the cost of the offshore part.

Dual sourcing

Dual sourcing is qualifying two suppliers for the same part so production can continue if one has a capacity, quality, or supply problem. It usually costs more than single sourcing because of duplicate tooling and split volume, and buyers weigh that cost against supply risk.