Request For Quotation

Posted in Operations and Supply Chain Terms, Total Reads: 524

Definition: Request For Quotation

A request for quotation (RFQ) is a standard business process whose purpose is to welcome suppliers into an bidding procedure on particular items or administrations. It is a document that an organization submits to one or more potential suppliers eliciting quotations for a product or service.


An RFQ typically involves critical data like the price per item, payment terms, quality level per item or contract length are conceivable to be asked for amid the offering procedure. RFQs are most appropriate to items and administrations that are as institutionalized and as commoditised as would be prudent, as this makes every supplier's quote similar.


It regularly requires the bidder to separate expenses for every period of the undertaking in order to permit the requesting organization to analyze distinctive offers. An RFQ permits different contractors to provide a quotation, among which the best will be chosen. An RFQ seeks an itemized list of prices for something that is well-defined and quantifiable in nature. It additionally makes the potential for focused offering a considerable measure higher, since the suppliers could be very sure that they are not by any means the only ones offering for the items.


For example, an administration office hoping to purchase 500 PCs with a specific hard drive size and processing speed will convey a RFQ. Since the item is institutionalized, the agency is better ready to contrast distinctive quotes with see which one is most appropriate.


Effective RFQs possess the following characteristics

• Be specific. Stipulate all pricing and product specifications..

• Define service expectations. Be sure to detail what you anticipate from the supplier with respect to support and backing of the item for which you are getting cited

• Request conveyance desires. On the off chance that this critical subtle element is not as of now stipulated in the RFP, purchasers should plan conveyance of items and administrations.

• Be cost cognizant. Keep in mind that there is an expense to the supplier to plan reactions. Seek only necessary data that increase the value of your business

• Give the supplier proper time to react. Suppliers need plentiful time to create and work through arrangement


Hence, this concludes the definition of Request For Quotation along with its overview.


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