Question: Collaborative Planning, Forecasting, and Replenishment (CPFR) is a web-based tool used to coordinate demand forecasting, production and purchase planning, and inventory replenishment between supply chain
Collaborative Planning, Forecasting, and Replenishment (CPFR) is a web-based tool used to coordinate demand forecasting, production and purchase planning, and inventory replenishment between supply chain trading partners. In practice CPFR often doesn't deliver on its' promise because; 1) Computer systems at supplier companies cannot be made to work with each other. 2) Forecast errors accumulate as data exchanges are made down the supply chain culminating in the feast or famine phenomena known as the bullwhip effect. 3) Firms in a supply chain may not trust each other sufficiently to share information openly. 4) conflicting objectives between the profit-maximizing vendor and the cost-minimizing customer give rise to adversarial supply chain relationships.
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