Module Objectives

Upon completing this module, you will be able to:

•Understand about RFQ & Quotation Functionality.

•Create several RFQs for an RFQ activity.
•Enter the incoming quotations for your RFQs
•Execute a price comparison for your quotations

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Agenda

• Introduction to RFQ and overview of procurement process.

• Creation of RFQ, Capture Quotation, comparison &
Rejection Of Quotation.
• Customization settings for RFQ

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Introduction to RFQ and overview of
procurement process.

• Request For Quotation (RFQ) is an invite made to a vendor by purchasing

organization to submit a quotation for the supply of goods or service performance.

• A quotation is a reply by a vendor to a purchasing organization related to the

supply of goods or service performance subject to specified conditions.

• Price Comparison is the process of comparing the prices for all the quotations
received from vendors.

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Introduction to RFQ and overview of
procurement process (Cont.)

RFQ & Quotation Process in Purchasing:

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Introduction to RFQ and overview of
procurement process (Cont.)

Important Fields in RFQ / Quotation:

•Collective Number : You can link several RFQs that belong together using a
collective number.

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Introduction to RFQ and overview of
procurement process (Cont.)

An RFQ consists of the RFQ header and the items.

• RFQ header
• Contains general information on the RFQ, such as the vendor’s address
• Items
• Contain the total quantities and delivery dates for the materials or services
specified in the RFQ.
• An item of a quotation may contain a delivery schedule made up of a number of
schedule lines in which the total quantity is broken down into smaller quantities
to be delivered on the specified dates over a certain period.
• Item categories can be used to request for different stock types: Consignment,
Service, Subcontracting etc(Stock types will be covered in later topics).

Note: In contrast to other purchasing documents, you cannot enter an account

assignment in an RFQ.

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Introduction to RFQ and overview of
procurement process (Cont.)
• Quotation
• A quotation is legally binding on the vendor for a certain period. The quotation
is the vendor’s response to a request for quotation issued by a purchasing
organization.
• A quotation consists of items in which the total quantity and delivery date of an
offered material or service are specified.
• Similar to RFQ an item of a quotation may contain a delivery schedule.
• For service items the quantities of the quotation are set out in service lines,
representing individual jobs or activities.
• E.g. For painting a building we may have different service lines such as
cleaning the walls, filling of cracks, applying primer and painting the walls
etc.
• Conditions can apply at various levels:
• To the entire quotation
• At item level, to the material to be supplied or to the planned procurement in
the case of services
• At service line level for individual services (tasks or activities)
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Introduction to RFQ and overview of
procurement process (Cont.)
• Process Flow for RFQs
• You create an RFQ either manually or by referencing an already existing RFQ,
requisition, or outline purchase agreement.
• You specify which vendors are to receive the RFQ.
• A separate document is then created for each addressee.
• You enter the prices and conditions set out in the quotation submitted by the
vendor into the RFQ document.
• You carry out a comparative appraisal of several vendor quotations by means
of the price comparison list.

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Agenda

• Introduction to RFQ and overview of procurement process.

• Creation of RFQ, Capture Quotation, comparison &
Rejection Of Quotation.
• Customization settings for RFQ

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Creation of RFQ
1. Initial and Creation Screen of RFQ – ME41

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Creation of RFQ

2. Item Details of the RFQ

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Creation of RFQ
3. Vendor Address on RFQ

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Capture Quotation

Enter The Details received from Vendor(ME47)

To Display Quotation: ME48

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Comparison and rejection of Quotes

• You can compare the prices from all quotations received as a result of a
competitive bidding process using the price comparison list
• The comparison list ranks the quotations by item from lowest to highest price. 

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Comparison and rejection of Quotes

Prerequisites
•Before you generate the price comparison list, you need to consider the
following:
• If possible, each quotation should have pricing data for the same item. Only
then is the correct interpretation of the mean and total values possible.
• E.g. If quotations 1 and 2 have pricing data for item 1, but quotation 3
only has price information for item 2, then the system does not have
enough information to accurately compare the prices of all three
quotations.
• If a quotation is submitted in a foreign currency, the price is automatically
translated into the currency of the company code, which is determined by
your purchasing organization.
• You should therefore make certain that up-to-date exchange rates are
defined in your system(this would be done by Finance team)

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Comparison & Rejection Of Quotation.

To compare the Quotes, we use transaction ME49. This will usually be executed by
using Purchase Organization and collective number

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Comparison & Rejection Of Quotation.

Quotation Comparison:

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Agenda
• Introduction to RFQ and overview of procurement process.
• Creation of RFQ, Capture Quotation, comparison &
Rejection Of Quotation.
• Customization settings for RFQ

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Customization settings for RFQ (Cont.)

Like PR, Following Customization Settings influence a RFQ during Creation,

Change or Display Mode:

•Document Types

•Define Number Ranges

•Define Screen Layout at Document Level

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Customization settings for RFQ (Cont.)

Document Types : Document Type is the key which controls the entire attributes
of a RFQ such as :

• Number Ranges
• Item Interval
• Field Selection Control.

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Customization settings for RFQ (Cont.)

• Document Types :

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Customization settings for RFQ (Cont.)

Number Ranges: In Purchasing Document Type, it is possible to assign

internal and External both the Number Ranges.
In customization Menu, you need to first define the number ranges and then you
can assign the number Ranges to required document type settings.

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Customization settings for RFQ (Cont.)
Screen Layout at Document level: In Purchasing Document Type, it is
possible to set few fields as Required, Optional and Display option. This is done
with the help of field Selection Keys.

In customization Menu, you need to first define the Field Selection Keys and then
you can assign the these Keys to required document type settings.

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Discussion
• Explain the Difference Between RFQ and
Quotation.
• Discuss about the Document type and it’s uses
in RFQ process.
• Discuss about the Quotation Comparison
Process and it’s purpose.

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Checkpoint
• What is collective number in RFQ?
• What is the difference between RFQ and Quotation.
• Is it possible to create Quotation without PR?
• What is the maximum Length of the collective number.

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Module Summary

You should now be able to:

•Explain the Process of RFQ, Quotation, Comparison & Rejection.

•Explain Various Important Data maintained in RFQ & Quotation.

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Questions and Comments
• What questions or comments
do you have?

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 Exercise

Exercise 8: Request For Quotation Process (60 min.)

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