Launch offer — 25% off with code LAUNCH-25 See plans →
Microlesson · 5-min read

Selection of Quotation and the Purchase Order Process

## From Quotation to Purchase Order

### Selection of Quotation / Proposal

After tenders are invited, qualifying vendors submit their price quotations. The purchase department prepares a comparative statement to analyse all quotations side by side.

Key evaluation factors are not limited to price:

  • Price
  • Quantity available
  • Quality offered
  • Time of delivery
  • Mode of transportation
  • Terms of payment
  • Reputation of the supplier

The purchase manager may also gather supporting information (e.g., previous performance, financial stability) before finalising the supplier. The aim is value for money plus reliable delivery and quality through a fair, objective process.

### Issuing the Purchase Order (PO)

Once the best quotation is selected, the purchase manager issues a formal Purchase Order — a written request to the supplier to deliver specified materials, at agreed rates, within a fixed timeframe. It acts as the legal and commercial confirmation of the purchase agreement.

Copies of the PO are sent to:

  • Stores / indenting department
  • Receiving department
  • Cost / Accounting department

A copy of the PO (with the purchase requisition) is retained in the purchase department to support follow-up on delivery, invoice approval and payment processing. This keeps all departments aligned and supports tracking, accountability and payment control.

⚠️ Common exam mistakes

  • Believing the cheapest quotation automatically wins — the comparative statement weighs quality, delivery time, transport, payment terms and supplier reputation alongside price.
  • Thinking the Purchase Order is just an internal note; it is a legal/commercial confirmation of the agreement with the supplier.
  • Forgetting that PO copies go to stores, receiving AND accounting — not only to the supplier.
Reference:
Now that you've read this — what's next?
Move from understanding → mastery in 3 clicks. Each option below picks up from this lesson's topic.
Start 15-min diagnostic