Quote comparison
Quote comparison is the normalization and side-by-side analysis of supplier quotes after an RFQ, aligning volumes, currencies, Incoterms, tooling and NRE charges, payment terms, and line items so prices can be compared on equal footing. Raw quotes rarely match: the lowest unit price is often not the lowest total cost once freight, tooling amortization, and terms are counted.
Examples
Tooling changes the winner: Supplier A quotes $4.20 per casting with $85,000 tooling; Supplier B quotes $4.65 with $20,000 tooling. At 100,000 lifetime units, A totals $505,000 and B $485,000, so B wins despite the higher piece price. At 250,000 units the answer flips back to A.
Incoterms trap: An overseas quote of $11.10 EXW looks 9% below a domestic $12.20 DDP offer. Adding $0.74 freight, $0.33 duty, and export packaging lands the overseas part at $12.17, a dead heat before counting six weeks of ocean transit and the inventory it forces.
Split-award scenario: On a 14-line RFQ no supplier is cheapest on everything. The normalized grid feeds a sourcing optimization run: nine lines to one shop and five to another saves 6.8% versus the best single-supplier award, and the second tooling set ($12,000) pays back in five months.
Definition
Quotes come back from a request for quote wearing different clothes. One supplier prices EXW in euros with tooling broken out; another quotes DDP in dollars with tooling amortized into the piece price; a third quotes 5,000-unit breaks against your 8,000-unit forecast and silently excludes two line items. Compare the raw numbers and you are awarding on formatting, not economics. The unit price at the bottom of each quote is the least comparable number on the page.
Normalization is the heart of RFQ analysis: restate every quote at the same volumes, one currency rate, and one Incoterms basis so you are comparing total landed cost; separate tooling and NRE, then amortize them over realistic lifetime volume; price the differences in payment terms and lead time; and check line-item completeness, because missing lines are where lowball quotes hide. Only then does an external reference matter: a should-cost analysis says whether the best normalized quote is genuinely good or just the least bad.
On multi-line events, the normalized comparison feeds award scenarios, including split awards across suppliers. LightSource, an AI-native procurement platform for direct materials, extracts line items from supplier quote files and builds this normalized comparison automatically.
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