AI
AI in Procurement
Comparing supplier quotes starts with the total payment for the order, not the price per unit. Minimum order quantity (MOQ), delivery time, and shipping can flip the winner even when one supplier charges less per item. In this exercise, AI extracts terms from both documents and calculates the totals; the buyer then checks the result at four specific points.
The training task: the request and both proposals
This is a training exercise - all amounts, quotes, and terms are created to demonstrate the method. No real purchase is made, no client data is used, and nothing is sent to any supplier.
Production office, October 4, 2026. Needed: 60 packs of A4 paper, 500 sheets per pack. Quality is confirmed identical across both quotes. Delivery no later than 5 business days after the agreed order. Warehouse capacity: maximum 80 packs. Both prices are final and include all mandatory taxes and fees. Currency is USD for both, no conversion. Both quotes are valid for 10 business days from October 4.
Quote A, version 1, dated 04.10.2026. A4 paper, 500 sheets per pack. Price: 6 USD per pack. Sold by the pack; minimum order: 60 packs. Shipping: 20 USD for the whole order, final amount. Delivery time: 3 business days. Payment: 100% on agreement. No other fees.
Quote B, version 1, dated 04.10.2026. Same paper, but sold only in whole boxes of 10 packs. Price: 55 USD per box. Minimum order: 8 boxes. Shipping included in the price. Delivery time: 7 business days. Payment: 100% on agreement. No other fees.
Why the cheaper quote per unit costs more for the full order
Quote B has a lower price per pack - 5.50 USD versus 6. But MOQ (minimum order quantity) forces you to buy more than you need, and the delivery time falls outside the request criteria. The table shows all parameters together.
| Parameter | Quote A | Quote B |
|---|---|---|
| Unit of sale | pack (500 sheets) | box (10 packs) |
| Price per pack | 6 USD | 5.50 USD |
| Minimum order | 60 packs | 8 boxes (80 packs) |
| Shipping | 20 USD separate | included |
| Delivery time | 3 business days | 7 business days |
| Payment | 100% on agreement | 100% on agreement |
| Price finality | yes, taxes included | yes, taxes included |
Total payment for the training request of 60 packs.
Quote A. 60 packs at 6 USD is 360 USD. Add shipping of 20 USD. Total: 380 USD. Delivery time is 3 days - within the 5-day limit. MOQ is 60 - exactly what is needed.
Quote B. 60 packs is 6 boxes. But MOQ is 8 boxes. Round up: 8 boxes at 55 USD is 440 USD. You receive 80 packs, 20 extra. Delivery time is 7 business days - outside the 5-day limit.
Result: Quote B is cheaper per pack, but the total payment is 60 USD higher and the delivery time fails the request criteria.
A common mistake: "B is cheaper - take six boxes for 330 USD." MOQ here is 8 boxes - six will not be sold, the minimum is 80 packs at 440 USD. And even without the MOQ issue, a 7-day delivery against a 5-day requirement already rules out Quote B.
The extra 20 packs from ordering 8 boxes are not lost money - the remainder may be useful next quarter. But the payment right now is different, and that must be noted in the memo.
How to write the AI query for comparing two quotes
To keep the model from dropping conditions from the quotes, you need to feed it structured data - each condition on a separate line with an explicit value. Below is the proposed query. It was not run; it shows how to structure the input.
You are an assistant to an office buyer. Extract conditions from two
commercial proposals for comparison and calculate the total payment
for the request.
REQUEST (dated 04.10.2026):
- Item: A4 paper, 500 sheets per pack. Quality confirmed identical.
- Quantity: 60 packs.
- Delivery time: no later than 5 business days after the agreed order.
- Warehouse limit: maximum 80 packs.
- Selection criterion: minimize total payment among proposals with
matching item and delivery time. Tax recovery assessment is not
part of this task.
- Currency: USD for both, no conversion.
- Both prices are final and include all mandatory taxes and fees
on the goods.
- No additional components beyond the explicitly described shipping.
- Both versions valid for 10 business days from 04.10.2026.
QUOTE A, version 1, dated 04.10.2026:
- A4 paper, 500 sheets per pack.
- Price: 6 USD per pack.
- Sold by the pack. Minimum order: 60 packs.
- Shipping: 20 USD for the whole order (final amount includes all
mandatory shipping charges).
- Delivery time: 3 business days after the agreed order.
- Payment: 100% on order agreement.
- No other mandatory fees.
QUOTE B, version 1, dated 04.10.2026:
- A4 paper, 500 sheets per pack. Box = 10 packs.
- Price: 55 USD per box.
- Sold only in whole boxes. Minimum order: 8 boxes.
- Shipping: included in the price.
- Delivery time: 7 business days after the agreed order.
- Payment: 100% on order agreement.
- No other mandatory fees.
TASK:
1. Build a comparison table (unit of sale, price per unit, MOQ,
shipping, delivery time, payment, price finality).
2. Calculate the total payment for 60 packs under each quote.
If MOQ requires more, round up and state how many packs
will actually be received.
3. Check each quote's delivery time against the 5-business-day limit.
4. Check the warehouse limit of 80 packs.
5. Write a memo: which quote meets the request criteria, with direct
quotes of conditions from each document. State that the decision
is a training exercise and not a real purchase.
What a correct answer looks like and how to check it
A correct answer contains the calculation, direct quotes from the source documents, and a clear statement of why one quote is rejected. Below is an example composed by the author - not the output of a model run.
Comparison for the request dated 04.10.2026 (60 packs A4, delivery
within 5 business days, warehouse within 80 packs):
Table:
- Quote A: pack, 6 USD, MOQ 60 packs, shipping 20 USD, delivery
3 days, final price with taxes.
- Quote B: box (10 packs), 55 USD, MOQ 8 boxes (80 packs),
shipping included, delivery 7 days, final price with taxes.
Calculation:
- Quote A: 60 x 6 + 20 = 380 USD. Delivery 3 days, passes. MOQ 60,
exact match.
- Quote B: 60 packs = 6 boxes, but MOQ is 8. Take 8 x 55 = 440 USD.
Actually 80 packs (20 extra). Delivery 7 days, does not pass
the 5-business-day limit.
Conclusion: Quote A meets the request criteria. Total payment
380 USD, delivery 3 business days. Quote B is rejected on delivery
time; its price per pack (5.50) is lower than A's (6), but the
total payment is 60 USD higher and the delivery time does not fit.
Memo for approval: accept Quote A on the terms of version 1 dated
04.10.2026. Basis: 3-day delivery from Quote A, MOQ 60 from Quote A,
shipping 20 USD from Quote A. Do not purchase automatically:
decision is a training exercise, no real purchase is made.
After this kind of answer, check four points.
- The minimum order condition is preserved. The model sometimes writes "6 boxes are enough" without looking at MOQ 8. Verify the number in the answer against the original quote.
- The delivery time is not rounded. 7 business days cannot be treated as equivalent to 5. If the answer says "delivery time approximately matches" - that is an error.
- The 60 USD difference is not called savings. It is a difference between training figures, not a result of a real purchase.
- Quoted conditions match the source documents on key figures word for word. If a condition has no citation, it is unconfirmed and does not belong in the calculation.
If the answer says "B is cheaper - take six boxes," the correction is one step: put MOQ and delivery time back into the calculation. The table above makes this clear.
The specific wrong line in a memo:
"We accept Quote B: 6 boxes at 55 USD, total 330 USD, delivery time 7 days acceptable."
Corrected line:
"We accept Quote A on the terms of version 1 dated 04.10.2026. Total payment 380 USD (60 packs at 6 USD plus shipping 20 USD). Delivery time 3 business days, within the 5-day limit. Quote B is rejected: minimum order 8 boxes, i.e. 80 packs, and delivery time 7 business days does not fit within 5."
When AI adds value and when a spreadsheet is enough
Two quotes for the same paper in the same format with final prices - that is a simple task. The usefulness of automation is tested not by promises but by comparing results: take several real comparisons, do them manually and through the model, check quality and the full cycle. If a spreadsheet handles it, keep the spreadsheet.
AI is useful when quotes arrive in different formats, with corrections in emails, with different units of sale (rolls, packs, boxes), and with conditions scattered across several pages. The completed NIST KEA study (Knowledge Extraction and Application, updated 26.03.2025) works with exactly this problem: inconsistent sources and contradictory texts make operational decisions harder. NIST does not propose a ready-made office method and does not prove speed - it is context for why extracting conditions from messy documents remains a hard task.
AI proposes a draft with citations; the buyer verifies the figures and checks that citations match the originals. Time spent checking the answer is part of the total task cost.
Three principles from FAR (Federal Acquisition Regulation, sections 13.106-2 and 13.106-3, amendment FAC 2026-01 of 13.03.2026) are useful in any office. This is not Uzbek law and not a mandatory procedure, but the approach works:
- Include delivery to the destination in the total cost, not just the goods price (§13.106-2(a)). In our example, A's shipping is 20 USD separate; B's is included. Ignoring that difference is not acceptable.
- If a supplier's MOQ exceeds the request, report the facts to the ordering party and ask to confirm or change the requirements; record the basis (§13.106-3(a)(3)). In the training task this would look like: "Quote B does not sell less than 80 packs; the request is for 60. Please confirm that 20 extra packs are acceptable, or reject Quote B."
- Keep short records of prices, shipping, price lists, and suppliers; keep the original conditions and the calculation separate (§13.106-3(b)). When a supplier sends a correction, only the relevant line changes.
What to do when supplier documents contradict each other
Sometimes the conditions in the quote and in an email do not match. In the training scenario, Supplier A sends an email dated October 4: "Shipping is paid separately per calculation." This does not confirm the 20 USD figure from the quote - it raises the question of which document applies.
The correct note in this case:
Clarification on Quote A dated 04.10.2026. Supplier's email dated
04.10.2026 states "shipping is paid separately per calculation."
The 20 USD amount from the quote is neither confirmed nor refuted.
The total of 380 USD is not yet final. No final choice is made
until the supplier responds. Request to supplier: confirm the
final shipping cost, delivery time, and which quote version applies.
Do not substitute zero for 20 USD. Do not take an average. A later email does not automatically cancel the quote.
How the choice changes when the request changes
With different request parameters, the quote decision can flip. New training request: 80 packs of A4, delivery time up to 10 business days.
Quote A: 80 x 6 + 20 = 500 USD. Delivery 3 days, passes.
Quote B: 8 x 55 = 440 USD. Delivery 7 days passes within the 10-day limit. Now B is 60 USD cheaper.
The choice changed with the request parameters - these are two different decisions on two different sets of conditions.
For real quotes where tax is listed separately, bring both prices to the same basis. Cash payment (what actually leaves the account) and book value (what goes into reporting) are different things and must not be mixed. The official YourEurope overview of VAT rules in the EU confirms: conditions differ by country, and import and export have their own terms. There is no universal "subtract some percentage." When applicability is unclear, ask the accountant - in this training example both quotes use final prices, so tax calculation is not part of the task.
Questions asked most often
If the second quote is cheaper per unit, why did it lose?
Because the minimum order quantity forces buying more than needed, and the delivery time fails. Quote B is cheaper per pack - 5.50 USD versus 6. But MOQ for B is 8 boxes (80 packs): for a request of 60 packs, you buy 20 extra and pay 440 USD instead of 380 USD. Delivery for B is 7 business days, and the request requires no more than 5. Total payment is built from price, shipping, and the actual quantity that must be ordered.
What if the supplier's minimum order exceeds the request?
Record the facts, inform management, and ask to confirm that the extra volume is acceptable - or change the requirements. Do not guess on behalf of the ordering party. FAR 13.106-3 describes exactly this procedure for US federal procurement, and the same logic applies in any office. In the training task the correct note is: "Quote B does not ship less than 80 packs; the request is for 60. Please confirm that 20 extra packs are acceptable, or reject Quote B." No final decision is made until confirmation arrives.
Shipping is not stated in the quote. Does that mean it is free?
No. An unknown amount is not equal to zero. If shipping is not stated explicitly, ask the supplier to confirm it. Until the answer arrives, the total payment is not final. Including an unconfirmed amount in the calculation means working with wrong data. Compare total payments only when all cost items for both suppliers are confirmed.
How to account for tax and currency in a quote comparison?
Both quotes must be in the same currency and on the same economic basis. If one supplier quotes in USD with shipping included and another in EUR without shipping, bring the conditions to the same form before comparing. Do not invent tax rates: when applicability is unclear, ask the accountant. In this training example both prices are final with all taxes included, so tax calculation is not part of the task.
How to verify that the model did not drop a condition from the quote?
Check every figure in the answer against the original quote text. Direct quotes of conditions must match the source documents on key figures word for word. If there is no citation, the condition is unconfirmed and does not belong in the calculation. Check four points: the minimum order matches MOQ from the quote; the delivery time is not rounded; the difference in totals is not called savings; every figure in the memo cites the source document.
When is AI useful for comparing quotes, and when is a spreadsheet enough?
If there are two quotes in the same format with final prices, a spreadsheet handles it. AI is useful when quotes arrive in different formats, with corrections in emails, and with conditions spread across several documents. Test usefulness directly: take several real comparisons, do them manually and through the model, check quality and time. Time spent checking the answer counts toward the total task cost.
Do FAR rules apply to procurement outside the United States?
FAR (Federal Acquisition Regulation) is the requirement framework for US government agencies, not an international standard. The three principles from FAR 13.106-2 and 13.106-3 are cited as an example of a methodical approach: include shipping in the total payment, document the reasons for rejecting a supplier, keep original conditions separate from the calculation. For office procurement outside the US, these principles are a reference point, not a mandatory procedure.
How to compare supplier quotes by total payment
Comparing supplier quotes starts with the total payment for the order, not the price per unit. AI helps extract conditions and calculate totals - especially when documents arrive in different formats. Verifying the answer is part of the total task cost.
If you have a specific procurement task where quotes arrive in different formats and with corrections in emails, write to hello@majento.ai. Show the task - we will show how to structure the query to the model and how to verify the answer. No speed promises and no pricing.
Training on real tasks and processes is described at aimasters.me. For those who want to work through their own process with a Majento consultant, in-person consultations are available. Source: Majento consultations and training courses.
Telegram channel: https://t.me/shimaoz - materials on the same topics: extracting conditions from documents, checking arithmetic, structuring queries to models.