Effective response to RFQs and supplier development: A supplier's perspective

Considering multiple attributes while evaluating request for quotes (RFQs) responses from suppliers is gaining significant importance in industrial procurement. While price has traditionally been the most important factor in evaluating RFQ responses, incorporation of non-price attributes such as quality and delivery performance is becoming essential and critical. Research on multi-attribute RFQs has received significant attention in an auction format with models addressing issues relating to auction mechanism design, winner determination, and auction dynamics, primarily from a buyer’s perspective. There have been few approaches, if any, that have investigated the issue of response to multi-attribute RFQs from a supplier’s perspective, which is the focus of this paper. Such an approach will assist a supplier in effectively responding to RFQs, thereby maximizing the likelihood of winning future contracts. It also indirectly assists in supplier development and helps foster competition among suppliers, which benefits both the buyers and the suppliers. We develop mathematical models that address this important issue and demonstrate their usefulness through an illustrative dataset. & 2008 Elsevier B.V. All rights reserved.