Request For Quotation Research Articles

Intelligent RFQ Summarization Using Natural Language Processing, Text Mining, and Machine Learning Techniques

Request for quotation (RFQ) is a lengthy document soliciting vendor products and services according to rigid specifications. This research develops an integrated natural language processing (NLP), text mining, and machine learning approach for intelligent RFQ summarization. Over 1,300 power transformer RFQ requests are used to build a word-embedding model for training and testing. Domain keywords are extracted using N-gram TF-IDF. The method automatically extracts essential specifications such as voltage, capacity, and impedance from RFQs using text analytics. The K-means algorithm groups the sentences of each specification. The TextRank algorithm identifies important sentences of all specifications to generate RFQ summaries. The summarization system helps engineers shorten the time to identify all specifications and reduces the risk of missing important requirements during manual RFQ reading. The system helps improve the complex product design for manufacturers and improve the cost estimation and competitiveness of quotations in a highly competitive marketplace.

Ambiguity Tolerant Commissioning Ontology: From an upper ontology to a domain specific implementation

There are no standardized interfaces or descriptions for the outsourcing of production orders, e.g. through cloud manufacturing. For this reason, an upper ontology was developed in a preliminary work; associated models describe the entire process and parameters from the request for quotation over its return to the conclusion of the contract. Products can either be described by their final state or by the initial product in conjunction with the applied processes.In this paper, the process from this upper ontology to a concrete implementation is further elaborated and a middleware is introduced which offers a machine-readable interface to edit the ontology as well as various validation options are addressed.

Using supervised machine learning for B2B sales forecasting: A case study of spare parts sales forecasting at an after-sales service provider

In this paper, we present a method to use advance demand information (ADI), taking the form of request for quotation (RFQ) data, in B2B sales forecasting. We apply supervised machine learning and Natural Language Processing techniques to analyze and learn from RFQs. We apply and test our approach in a case study at a large after-sales service and maintenance provider. After evaluation we found that our approach identifies ∼ 70% of actual sales (recall) with a precision rate of ∼ 50%, which represents a performance improvement of slightly more than a factor 2.5 over the current labor-intensive manual process at the service and maintenance provider. Our research contributes to literature by giving step-by-step guidance on incorporating artificial intelligence in B2B sales forecasting and revealing potential pitfalls along the way. Furthermore, our research gives an indication of the performance improvement that can be expected when adopting supervised machine learning into B2B sales forecasting.

Risk Analysis on the Equipment and Material Procurement Process of Engineering, Procurement, and Construction (EPC) Projects

Equipment and material non-compliance with the project requirements is one of the issues causing delay in large EPC projects as rework actions are inevitable. Detecting and controlling the potential risks at the procurement process of equipment and material can be done to anticipate this issue. This study aims to identify the major risks and recommend the response strategies to the equipment and material non-compliance by adopting a quantitative method through expert validation using Delphi method, questionnaire surveys, and risk analysis, as well as qualitative method through benchmarking study and interview with experts. The result of this study shows that lacking in the inspection of requirement, complete Request for Quotation (RFQ) information, contract term verification, fixed design requirements, attention to Purchase Order (PO) review, supervision to engineering design and drawing, and proper fabrication procedure are major risks that can potentially cause non-compliance. Improvement in communication between stakeholders and supervision to ensure the conformity with specifications are considered as the key elements in mitigating the identified major risks.

Applying Statistical Learning Methods for Forecasting Prices and Enhancing the Probability of Success in Logistics Tenders

The concept of logistics tender or request for quotation is gaining importance among the logistics and transportation firms. Many long-term and long-distance transportation services are offered now under this type of reverse auction, and firms in the sector have to provide competitive prices if they want to win tenders. This paper explores the application of forecasting and statistical learning methods to enhance the competitiveness level of a firm when applying for tenders. On the one hand, time series analysis is used to: (i) forecast the long-term cost of the logistics service; and (ii) construct a ‘risk-aware’ interval for the prices to be offered in the bid. On the other hand, historical data is used to develop statistical learning models. These models are able to predict the probability of success in a given tender based on the actual values of different variables, including the service prices established in the previous stage. Some preliminary results are given, as well as a discussion on how these methods can be integrated into optimization models.

Potential Strategies to Prepare a Unique RFQ – The Indian Valve Sourcing and Expediting Series

Observation and documentation is an integral part of any sourcing and expediting activity. Every Sourcing manager, sourcing engineer, sourcing expeditor, sourcing coordinator must be well aware of the documentation process and what to do and what not to do. Whenever a sourcing office initiates a procurement process, it does so through requests. If a sourcing office wants to compare competitive offers, then it can mass manage through sending Request for Quotation (RFQ). The sourcing office will send a request listing the technical specification and the expected terms and conditions to competitive suppliers and gets back quotations in return. Though the process of generating an RFQ and converting it into a successful Purchase Order (PO) is simple, it has to be done systematically, to avoid chaos in document management. When this process is effectively managed, mass management of quotation and comparison becomes easier and the sourcing office will be able to make decisions in a systematic manner. However, sourcing offices adhere to the procurement policies of their Parent Organization and hence the objective of any valve sourcing office in India has to be two fold. One, to negotiate contract terms, such that the expected product quality is achieved within the prescribed financial quota. Second, the sourcing office will have to follow the norms and guidelines provided by the parent organization. Hence, it is the duty of the Regional Sourcing Manager to perfectly compose an RFQ, such that the RFQ remains comprehensive. This article rides through the basic RFQ architecture and provides guidelines to compose an attractive RFQ without compromising on the procurement policies of the Parent Organization.

The Development of E-Procurement System for an IT Consultant Company

The research objective was to identify, analyze, and design a procurement information system that was developed by an IT consultant company for their client companies. Data collection techniques used were literature study, field study, document study, learning and trying the existing e-procurement system. Then, it was followed by analysis on general procurement processes using objectoriented analysis with Unified Modeling Language (UML) as tools. The result is a web-based e-procurement application that supports documentation and storage of transaction data. It also generates reports in accordance with company requirements. The main system features are Request Usage Form (RUF), Purchase Request (PR), Purchase Request Summary (PRS), Request for Quotation (RFQ), Quotation, Winner Selection (WS), Purchase Order (PO), and Receive Report (RR). It can be concluded that the developed system can support procurement processes effectively and efficiently, and integrate the inventory and approval system. Integration with inventory system will result in easier stock checking and automated update of goods data in the inventory system. It includes creating item, editing item, and receiving made report document. Integration with approval system will also result in the simpler process of documents approval in the e-procurement system.

Strategic Benefit of Request for Quotation

We study how the procurement process may help a buyer reduce purchasing costs under a dual-sourcing setting. First, we analyze the equilibrium outcomes when the buyer simultaneously or sequentially bilaterally negotiates with the suppliers. We establish coordination results and characterize the buyer's maximum equilibrium profit under such bilateral bargaining settings. Moreover, we show that the buyer can benefit from a request for proposal/quotation (RFx) stage that precedes the negotiation stage when the suppliers are imperfect substitutes. Specifically, by endogenizing the sequence of negotiations via the offers tendered in the RFx stage, the buyer's equilibrium profit with an RFx is (weakly) higher than her maximum equilibrium profit without an RFx. Furthermore, under a complete information setting, the buyer accepts both offers generated in the RFx stage and additional negotiation needs not to be carried out in equilibrium. Our insights extend to a random demand setting, in which the buyer first negotiates contracts with the suppliers and then decides order quantities after demand realization.

Request for Quotation and Request for Proposals as a Bidding Form

Request for Quotation and Request for Proposals as a Bidding Form

With or Without Forecast Sharing: Competition and Credibility under Information Asymmetry

Forecast sharing among trading partners lies at the heart of many collaborative and contractual supply chain management efforts. Even though it has been praised in both academic and practitioner circles for its critical role in increasing demand visibility, some concerns remain: The first one is related to the credibility of forecast sharing, and the second is the fear that it may turn into a competitive disadvantage and induce suppliers to increase their price offerings. In this study, we explore the validity of these concerns under a supply chain with a competitive upstream structure, focusing specifically on (i) when and how a credible forecast sharing can be sustainable, and (ii) how it impacts on the intensity of price competition. To address these issues, we develop a supply chain model with a buyer facing a demand risk and two heterogeneous suppliers competing for order allocation from the buyer. The extent of demand is known only to the buyer. The buyer submits a buying request to the suppliers via a commonly used procurement mechanism called request for quotation (RFQ). We consider two variants of RFQ. In the first type, the buyer simply shares the estimated order quantity with no further specifications. In the second one, in addition to this, the buyer also specifies minimum and/or maximum order quantities. We fully characterize equilibrium decisions and profits associated with them under symmetric and asymmetric information scenarios. Our main findings are that the buyer can use a RFQ with quantity restrictions as a credible signal for forecast sharing as long as the degree of demand information asymmetry is not too high, and that, contrary to above concerns, the equilibrium prices that emerge between competing suppliers under asymmetric information may indeed increase if the buyer can not share forecast information credibly with its upstream partners.

Goal Orientation and Preparation Process in Online Reverse Auctions:

AbstractWhile online reverse auctions (ORAs) have become a popular tool to conduct business-to-business procurement, academic research and practical guidance are still limited in delineating salient differences to offline procurement, specifically as these pertain to the corporate buyer's goal orientation and preparation process preceding the negotiations. This article focuses on these fundamental dimensions characterizing the strategic sourcing approach, and contrasts their pursuit in ORAs and offline procurement. We consider a multi-item request for quotation (RFQ) and investigate the dimensions of price competitiveness and risk reduction as part of a buyer's goal orientation, and the aspects of information search and extent of analysis as part of the buyer's preparation process. Drawing on tenets from transaction cost economics, complemented with the literature in industrial buyer behavior, we theorize that the goal of price competitiveness is pursued to a greater degree in ORAs, whereas the goal of risk reduction is pursued to a greater degree in offline procurement. Furthermore, we suggest that both information search and extent of analysis are greater in ORAs than in offline procurement. These contentions are tested with data collected from 825 procurement professionals. Various robustness checks and exploratory extensions taking into account contingency factors are conducted. Our primary contributions lie in the provision of a theoretically grounded framework contrasting ORAs to offline procurement along the dimensions of a buyer's goal orientation and preparation process, and the empirical test with a large-scale survey focusing on the unique context of multi-item RFQs. Insights for academic theory and managerial practice are discussed.

Business Process Models for Integrated Supply Chain Planning in Open Business Environment

With advances of several enabling technologies such as web services, ontology, and semantic web, the business envi- ronments are shifting to an open business environment where business applications autonomously share information and coordinate decisions with each other without any human intervention. This open business environment provides supply chains with the opportunity to generate executable supply chain plans, mitigating the inefficiencies of traditional supply chains such as bullwhip effect that is caused by the lack of information sharing. This paper aims to develop business process models that reflect realistic business scenarios and enable integrated supply chain planning in the open business environment. For this purpose, we first classify business patterns based on the types of “request for quotation,” and then business process models are developed for the business patterns using BPMN V1.1.

With or Without Forecast Sharing: Competition and Credibility under Information Asymmetry

Forecast sharing among trading partners lies at the heart of many collaborative and contractual SCM efforts. Even though it has been praised in both academic and practitioner circles for its critical role in increasing demand visibility, some concerns remain: The first one is related to the credibility of forecast sharing, and the second is the fear that it may turn into a competitive disadvantage and induce suppliers to increase their price offerings.In this paper, we explore the validity of these concerns under a supply chain with a competitive upstream structure, focusing specifically on (i) when and how a credible forecast sharing can be sustainable, and (ii) how it impacts the intensity of price competition. To address these issues, we develop a supply chain model with a buyer facing a demand risk and two heterogeneous suppliers competing for order allocation from the buyer. The extent of the demand risk is known only to the buyer. The buyer submits a buying request to the suppliers via a commonly used procurement mechanism called request for quotation (RFQ). We consider two variants of RFQ. In the first type, the buyer simply shares the estimated order quantity with no further specifications. In the second one, in addition to this, the buyer also specifies minimum and/or maximum order quantities. We fully characterize equilibrium decisions and profits associated with them under symmetric and asymmetric information scenarios. Our main findings are that the buyer can use a RFQ with quantity restrictions as a credible signal for forecast sharing as long as the degree of demand information asymmetry is not too high, and that, contrary to above concerns, the equilibrium prices that emerge between competing suppliers under asymmetric information may indeed increase if the buyer cannot share forecast information credibly with its upstream partners.

Partner-specific adaptations, performance, satisfaction, and loyalty in third-party logistics relationships

This paper addresses the question of the impact of alternative ways to partner-specific adaptations in third-party logistics provider relationships upon performance, customer satisfaction, and the degree of customer loyalty. It offers a view of related theory and a preliminary analysis of “request for quotation” documents. On this basis, several hypotheses are formulated. A questionnaire survey and structural equation modeling (SEM) are then used to test the hypotheses. The analysis shows that adaptations by logistics service providers exert positive influences on performance and customer loyalty. On the other hand, there is a negative impact of customers’ adaptations on performance because own adaptations are perceived as an effort. Nevertheless, the study provides evidence that the total effect of customers’ adaptations on customer loyalty is positive. The results suggest that third-party logistics providers should adapt systems and procedures to their customers’ specific requirements. Despite the negative impact found of customers’ adaptations upon the level of perceived performance, providers should promote moderate customers’ adaptations in order to increase customer loyalty.

A QFD‐, concurrent engineering‐, and target costing‐based methodology for ODM companies to formulate RFQs

PurposeThe problem that original design manufacturing (ODM) companies encounter with the request for quotation (RFQ) process is that there is no effective and efficient methodology for them to formulate accurate and profitable RFQs. The purpose of this paper is to present a quality function deployment (QFD)‐, concurrent engineering (CE)‐, and target costing‐based methodology for ODM companies to formulate accurate and profitable RFQs.Design/methodology/approachFrom eight Taiwan electronics ODM companies, 15 people are interviewed to understand their current methods for formulating RFQs and the problems of these methods. Based on the interview results, it was decided to make use of the merits of QFD, CE, and target costing by integrating them into the proposed methodology.FindingsA case study is presented to illustrate a successful application of the proposed methodology in a case company. The case study shows integrating QFD, CE, and target costing into the proposed methodology allows the authors to effectively and efficiently formulate an accurate and profitable RFQ for the case company.Research limitations/implicationsThe interview sample quantity of this study is limited to eight Taiwan electronics companies, which is insufficient to represent all ODM companies in various industries. For the future research, it is suggested researchers collect more samples from different industries in order to verify the effectiveness of the proposed methodology in ODM companies from different industries.Originality/valueThis paper aims to integrate QFD, CE, and target costing to come up with a systematic ten‐step approach that can accurately formulate the three parts of an RFQ: the product specifications proposal, the product price quotation, and the product development schedule. By adopting this methodology, ODM companies can provide accurate and profitable RFQs to ODM customers, thus increasing their chances of obtaining ODM business.

Discrete-event simulation for evaluating virtual organizations

Outsourcing is a major driver in the growth of virtual organizations (VOs) in the manufacturing domain. These outsourcing networks can be classified as VOs as they are created from different organizational entities for a specific purpose and exist for a specified period of time. This paper proposes the use of discrete event simulation (DES) as a means of evaluating proposed VO configurations within the request for quotation (RFQ) process. The work presented is targeted at manufacturing-based VOs that are created to carry out specific manufacturing tasks as outlined in an RFQ, rather than more general project-based VOs that are formed to carry out work within a less defined structure. Data from an existing virtual breeding environment (VBE), obtained during field research into outsourcing networks, is used to illustrate the use of DES to support VO creation. As DES requires a high level of skill to use, the design of an easy-to-use web-based application with an embedded simulation engine is described.

The use of bundling in B2B online reverse auctions

In industrial purchasing a request for quotation (RFQ) can consist of a single item, but is most often composed of two or more products and/or services bundled together. While such bundles are used in offline purchase negotiations, their criticality is heightened in online auctions due to their usual short duration and constrained bidding environment. Despite this importance, little systematic discussion or evaluation has taken place concerning bundling practice, especially as it relates to the individual items included in the bundle, the overall bundle composition, and the resulting supply base and ultimate bundle performance. This study investigates these issues by developing a conceptual model and testing it with a large-scale survey completed by purchasing professionals practicing bundling in B2B online auctions. Results indicate that crafting a more homogeneous bundle is most important in achieving a successful outcome. Furthermore, more complex or difficult-to-specify items do not impact perceived bundle performance, but do influence the supply base that is willing and able to bid on the business.

INCAS: a legal expert system for contract terms in electronic commerce

Electronic commerce is doing business via electronic networks. Paper-based trade documents such as, for example, request for quotation, purchase order or invoice are replaced by electronic messages, in particular Electronic Data Interchange (EDI) messages. These electronic messages are not only transmitted much faster than paper-based documents, but they can also be processed automatically by computers. An example of this automated processing of electronic messages is electronic contracting and negotiation where the actual trade contract is on-line negotiated and concluded via an electronic network. We present the legal expert system INCAS that can provide on-line explanations about the use of Incoterms in trade contracts. Incoterms stipulate which party (buyer or seller) is responsible for arranging and paying transport of the goods, and arranging the documents necessary for this transport (e.g. export and import clearance documents, certification of origin, quality certificates etc.). INCAS is implemented in the programming language Prolog. We also explain how the defeasible reasoning capability of Prolog is essential for modelling the reasoning about the Incoterms.

Reviews

This is No. 21 of Supplements to Computers in Libraries and reprints papers on online library catalogues presented to the March 1989 Computers in Libraries Conference held in Oakland, California. There are apparently three US procurement documents, Request for Proposals (RFP), Request for Information (RFI) and Request for Quotation (RFQ) which have to be completed when buying new, large‐scale equipment from suppliers and these documents dominate the process of choice and purchase. Several of the papers in this collection deal with completing these forms when acquiring or changing systems, and would have little interest in the UK. The other papers offer more general advice on coping with the problems which arise when manual processes are replaced by high‐tech systems. Such problems are exaggerated in cases where patrons expect more of the system than it can actually deliver. However, what is being described is essentially American practice and library users in the US have a subtly different attitude from that found on this side of the Atlantic. The value of the text to UK librarians would therefore be limited to the opportunity for making comparisons with their own systems.