an ORACLE APPS blog: Request for Quotation (RFQ) process in Oracle Purchasing:

A Request for Quotation (RFQ) is a formal request sent to the suppliers to find the pricing and other information for an item or items. Based on the information supplied, the supplier quotes a quotation against the RFQ form.

In general, RFQ’s are created before purchasing any item to actually know the price quotes from one or more suppliers.

RFQ’s can be auto created from an existing Purchase Requisition or can be a fresh RFQ.

There are three types of RFQ’s,

Bid: Used for a specific, fixed quantity, location and date. For example, a Bid would be used for a large or expensive piece of equipment that you've never ordered before or for an item that incurs transportation or other special costs. You cannot specify price breaks for a Bid RFQ or quotation.
Catalogue: Used for high-volume items or items for which your supplier sends you information regularly. A Catalog RFQ or quotation includes price breaks at different quantity levels.
Standard: Used for items you'll need only once or not very often, but not necessarily for a specific, fixed quantity, location, and date. For example, you could use a Catalog quotation or RFQ for office supplies, but use a Standard quotation or RFQ for a special type of pen you don't order very often. A Standard quotation or RFQ also includes price breaks at different quantity levels.

For demonstration purpose let us convert a Purchase requisition to Standard RFQ & Standard RFQ to Standard Quotation & the Standard Quotation into a Blanket Purchase Agreement.

Requisition – 11005997 has been created by the Purchase Requisition department.

We will create RFQ using Auto Create option. Navigate to Auto create form and enter the Requisition number & click find.

In Auto create method we can convert the requisition to RFQ either through Manual or Automatic method. Here we will see how to manually create RFQ.

Enable the Checkbox against the Requisition & select the Document Type as ‘RFQ’ and Click ‘Manual’ button.

Click on the Requisition line & click ‘Add To Document’ button

The selected Requisition line will be added to ‘Document Builder’ section.

Click ‘Create’ and enter ‘Supplier List Name’ & again click ‘Create’

Note: To know how to create a Supplier List click the following link

http://dj-oracleapps.blogspot.in/2015/07/defining-supplier-lists-in-oracle.html

System will display the generated RFQ Number.

Query the generated RFQ in RFQ’s form

Navigation: RFQ’s and Quotations → RFQ’s

Enter / Change the Ship To & Bill To locations

Due Date: This is the date by when you want your suppliers to reply. Purchasing prints the reply due date on the RFQ. Purchasing notifies you if the current date is between the RFQ reply due date and the close date when the RFQ is in Active status.

Enter the Reply Via code for the method you want the supplier to use to send the quotation. For example: by mail, telephone or FAX.

Enter the Close Date for the RFQ. Purchasing prints the close date on the RFQ. Purchasing warns you when you enter a quotation against a RFQ after its close date.

Select Require Quote Approval to enforce approval of any quotation referencing this RFQ before the quotation can be used for a purchase order.

Enter the beginning & ending Effective Dates for the supplier quotation.

Click ‘Terms’ tab to enter Payment Terms, Freight Terms, Carrier, FOB & Note To Supplier

Click ‘Price Breaks’ tab to enter the Price break details

Note: Price Breaks are available only in Catalogue & Standard RFQ.

Define as many Price breaks as needed. Enter Discounts & Effective From & To dates (if applicable) and Save.

Click ‘Suppliers’ tab to check / enter a list of Suppliers from whom you are going to request Quotations.

Note: Since we gave Supplier List Name while auto creating RFQ from Requisition, all the suppliers from the Supplier List will be listed here. Further you can delete / add suppliers by manually entering the Supplier & Site or from any other Supplier List by clicking ‘Add From List’.

Manually change the status of RFQ to ‘Active’ after entering all the required information’s.

Various statuses of RFQ and its Impact:

In Process - The initial status when you create the RFQ.
Active - Choose this status when the RFQ is complete and you are ready to send it to your suppliers. Only Active RFQ’s are printed.
Printed - The status assigned to the RFQ when you have printed at least one copy of it. RFQ is printed by running concurrent ‘Printed RFQ Report (Portrait/XML)’. You must change the status to Active if you want to reprint the RFQ.
Closed - Choose this status to close the RFQ when all suppliers have responded or when you no longer want responses. When you close an RFQ, Purchasing deletes all follow up notifications associated with it.

Once the RFQ is printed it will be sent to Suppliers. Suppliers will receive it & send back their Quotations. In order to record the data provided by the suppliers, convert the RFQ into Quotation

Query the RFQ, Tools → Copy Document

Select the Action, Type of Quotation and Supplier from whom you have received the Quotation, Site & click OK.

System will display the generated Quotation Number.

Repeat the same process for all the Suppliers.

Query the Quotation in Quotations form

Navigation: RFQ’s and Quotations → Quotations

In our case we have sent the RFQ for two suppliers & we have recorded the supplier quote in Quotations ‘14000002’ & ‘14000003’.

Query the Quotations and change the Price break as provided by the Supplier in their Quote.

Save the record and do the same for other Quotation as well.

Once the changes are done, Change the status to Active.

Quote Analysis:

Open the Quote Analysis form and enter the RFQ No. & click find

System will display all the Quotations recorded against the RFQ.

Select the line you want to Approve & click ‘Approve Entire Quotation’ button and select the Type, Reason for approving the Quotation, Approver and Click OK.

Query the approved Quotation, through Tools → Copy Document convert the Quotation to Purchase Order.

Note: A Standard Quotation can be converted as a ‘Blanket Purchase Agreement’ only.

Click OK

All the Quotation details will be copied to the generated Purchase order. Query the Purchase order, check the details & process.

Differences between the types of RFQ & Quotations:

Bid	Catalogue	Standard
Qty & Price is firm No Price Breaks Used for Items you’ve never ordered	For Normal Items Price Breaks available Used for High Volume of Items	For One time Purchase Price Breaks available For High / Special valued Items