Blanket Order

In this method, blanket orders are placed for items which are low cost or are MRO items (required for Maintenance, Repair and Operation). The intent is to prevent cost increase of the item by repeated ordering. These items are ordered on a time period commitment basis rather than on quantity commitment basis. 

Blanket orders are normally for around a year and are either fixed price or some another mutual agreed mechanism. The seller has to work more at servicing the customer rather than trying to convince the buyer. In this method, the buyer's paperwork is reduced considerably and he can concentrate his efforts on more productive work.