What does a "request for quotation" (RFQ) do?

A "request for quotation" (RFQ) serves the primary purpose of soliciting price quotes from suppliers for specific goods or services. In the procurement process, an RFQ is typically used when the purchasing organization has a clear understanding of the products or services needed and seeks to compare pricing and terms from various suppliers. The RFQ outlines the specifications and quantities required, allowing suppliers to provide their offers based on the same set of criteria, thereby enabling the purchasing organization to evaluate the responses objectively.

This function is essential in ensuring that the organization can make cost-effective decisions while also confirming the availability and pricing of essential goods and services. The RFQ process helps streamline procurement and encourage competition among suppliers, ultimately benefiting the organization by allowing for informed decision-making based on the best available options.