What is a quotation used for in business transactions?

• A. To request delivery instructions from the supplier.
• B. To sign off on shipping terms.
• C. To propose a price for specified goods/services to a potential customer.
• D. To confirm orders after payment has been processed.

Answer: (C)

A quotation is a formal price proposal for specific goods or services offered to a potential customer. It lays out what will be supplied, the price (and any taxes), quantities, delivery terms, payment terms, and how long the offer remains valid. The purpose is to give the buyer the information they need to decide whether to proceed and to enable the seller to win the sale. It is not a delivery instruction, not a sign-off on shipping terms, and not an order or confirmation of payment. In practice, once a quotation is accepted, the buyer may issue a purchase order and the seller then completes the sale, often followed by an invoice.