If a company does not have a current supplier for a part, they must issue a Request for Quote (RFQ) so their potential supplier can provide a detailed quote that might include more than just a per unit price, it may also include delivery date, and payment terms.
<h2>Further Explanation </h2>
Company
It is an organization that sells goods or services to the consumers.
Supplier
Also called as vendor, is a company or an organization that provides the materials or services needed by an another company or organization to produce their goods or services; or the materials or services needed by another company to run their business.
<em>For example: </em>
Company X is a company that creates and sells instant coffee. The nature of its business is called manufacturing. The typical supplier or vendor they have or they will look for would be: supplier of coffee beans, packaging materials, machine and equipment, office supplies and computers.
Request for a Quote
(RFQ)
A document given by a company to a potential supplier to ask them to submit a price quote for their goods and services and invite them to bid on the chance to be a supplier of the company for a certain projects. RFQ is also called as invitation for bid. RFQ is typically the first part of the bidding process before the submission of the request for proposal. Generally RFQs ask for a more detailed price quote.
How does RFQ works
In addition to the detailed pricing the supplier provides for their goods or services, they may also include in their quotation details such as payment terms and delivery dates. These are factors that may influence a company’s decision on whom to select among the bid selection.
<em>For example: </em>
A Business Process Outsourcing (BPO) company that wants to buy 500 computers with a specific hard drive size and processing speed, would send an RFQ to a number of vendors, as prospective bidders.
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Keywords: supplier, vendor, quote, quotation, bid
