Fundamentals of Purchasing

Fundamentals of Purchasing
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Contents
Introduction................................................................................................................................3
Request for Quotation (RFQ).....................................................................................................4
Requirements and conditions.....................................................................................................6
General terms and conditions...................................................................................................10
Conclusion................................................................................................................................12
References................................................................................................................................13
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Introduction
Procurement management is one of the most essential part of a business management.
Significant part of indirect cost is spent by management on procurement of raw material
required for production process. In addition to that there are various other capital expenditure
that will require procurement management strategies on part of management. This report will
be focused on development of a request for quotation for acquisition of capital assets from
different suppliers. Requisition for quotation is a document prepared by management for
inviting quotations from different suppliers. This report will be focused on David's Tea which
is a business organization operating in manufacturing and distribution of it all across Canada
(Monczka, Handfield, Giunipero & Patterson, 2015). Different aspects of inviting quotations
from supplier will be discussed in this report. This report will identify some of the most
common terms and conditions that should be included in the contract. In addition to that
providing specifications about capital asset is also an essential requirement. It is expected that
this report will help in preparation of an effective RFQ for David's Tea.
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Request for Quotation (RFQ)
As it is already discussed that a request for quotation is a formal document prepared by
organization for inviting quotations from different suppliers selected by the organization. It is
very important for organization to understand specific needs and requirements with relation
to asset or raw material that is required to be purchased. Quotations will be received from
supplier on the basis of specific needs and requirements. If management of the company is
not able to understand their own requirements correctly then there are chances that overall
indirect cost will increased significantly (Fredendall & Hill, 2016).
In the given scenario David's Tea is seeking to install new vending machines which will help
in the distribution of tea and other snacks at different stores of Canada. Management of the
company has estimated that around 12 vending machines would be very effective in the
current market. Request for quotation proposal is developed for the acquisition of vending
machines to the suppliers (Nair, Jayaram & Das, 2015).
Request for Quotation (RFQ)
David’s Tea Corporation
Address- 5430 Ferrier, Mount-Royal,
Quebec, Canada, H4P 1M2
Date 30/03/2019
Reference- Purchase of 10 vending
machines for distribution of pre-packaged
tea and other snacks.
Respected Sir/ Madam
This proposal has been prepared for requesting quotations for purchase of 12 vending
machines that will be able to distribute pre-packaged tea and other snacks. Delivery address
in this scenario would be headquarter of the company in Canada (Vrat, 2016). According to
general practice of the organization, this contract will be given to the supplier that will
provide assets under consideration with a reasonable price and effective after sale services.
Liquidity position of our company is very high and there will be no problems in relation
payments for acquisition of assets.
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