# How does the system select competitive suppliers?

URL: https://www.procureflow.ai/docs/faq/auto-negotiations/how-supplier-ranking-works



import { Step, Steps } from 'fumadocs-ui/components/steps'

When a BAFO round triggers in automatic mode, the system ranks suppliers using a four-level algorithm. Here's how it works with an example.

Example RFQ: Office Supplies [#example-rfq-office-supplies]

| Line Item            | Qty |      Alpha Co |    Bravo Ltd | Charlie Inc |   Delta Corp |  Echo Supply |
| :------------------- | --: | ------------: | -----------: | ----------: | -----------: | -----------: |
| A4 Paper (ream)      | 100 |  <u>$4.50</u> |        $4.80 |       $5.00 |        $5.00 |            — |
| Ballpoint Pens (box) |  50 |         $8.00 | <u>$7.20</u> |       $7.50 |        $7.50 |            — |
| Staplers             |  20 | <u>$11.00</u> |       $11.50 |      $12.00 |            — |       $12.00 |
| Notebooks (pack)     |  30 |         $6.50 | <u>$6.00</u> |       $6.20 | <u>$6.00</u> | <u>$6.00</u> |

<u>Underlined</u> = lowest price for that line item. "—" = no quote submitted.

<Steps>
  <Step>
    Count competitive wins [#count-competitive-wins]

    A supplier "wins" a line item when they have the lowest price. Ties count for both.

    | Supplier    |                Wins |
    | :---------- | ------------------: |
    | Alpha Co    | 2 (Paper, Staplers) |
    | Bravo Ltd   | 2 (Pens, Notebooks) |
    | Delta Corp  | 1 (Notebooks, tied) |
    | Echo Supply | 1 (Notebooks, tied) |
    | Charlie Inc |                   0 |

    Alpha and Bravo are tied with 2 wins. Delta and Echo are tied with 1 win.
  </Step>

  <Step>
    Compare value of winning items [#compare-value-of-winning-items]

    Calculate the total value of each supplier's winning line items.

    **Alpha vs Bravo (2 wins each):**

    | Supplier  | Calculation                   |    Total |
    | :-------- | :---------------------------- | -------: |
    | Alpha Co  | (100 × $4.50) + (20 × $11.00) | **$670** |
    | Bravo Ltd | (50 × $7.20) + (30 × $6.00)   |     $540 |

    Alpha wins on higher-value items, so **Alpha Co ranks #1**, **Bravo Ltd ranks #2**.

    **Delta vs Echo (1 win each):**

    | Supplier    | Calculation | Total |
    | :---------- | :---------- | ----: |
    | Delta Corp  | 30 × $6.00  |  $180 |
    | Echo Supply | 30 × $6.00  |  $180 |

    Both won the same item at the same price. Still tied! Move to the next level.
  </Step>

  <Step>
    Check breadth of participation [#check-breadth-of-participation]

    If still tied, suppliers who quoted on more line items rank higher.

    | Supplier    |               Items Quoted |
    | :---------- | -------------------------: |
    | Delta Corp  | 3 (Paper, Pens, Notebooks) |
    | Echo Supply |    2 (Staplers, Notebooks) |

    Delta quoted on more items, so **Delta Corp ranks #3**, **Echo Supply ranks #4**.
  </Step>

  <Step>
    Compare total quoted cost [#compare-total-quoted-cost]

    As a final tiebreaker, lower total cost wins.

    Charlie Inc has 0 wins but still quoted. They rank last (#5).
  </Step>
</Steps>

Final Ranking [#final-ranking]

| Rank | Supplier    | Why                                             |
| ---: | :---------- | :---------------------------------------------- |
|    1 | Alpha Co    | Most wins (2), highest competitive value ($670) |
|    2 | Bravo Ltd   | Most wins (2), lower competitive value ($540)   |
|    3 | Delta Corp  | 1 win, tied value, but quoted more items (3)    |
|    4 | Echo Supply | 1 win, tied value, fewer items quoted (2)       |
|    5 | Charlie Inc | No competitive wins                             |

If your template invites the **top 3 suppliers**, Alpha Co, Bravo Ltd, and Delta Corp receive BAFO invitations.