Which of the following strategies is used primarily for demand planning?

Which of the following strategies is used primarily for demand planning?

A. Build-to-order scheduling

B. Push-pull replenishment

C. Collaborative planning, forecasting, and replenishment

D. Vendor-managed inventory

View Answer

Answer: C

Explanation:

Collaborative Planning, Forecasting, and Replenishment (CPFR) is a strategy used primarily for demand planning by improving coordination and collaboration between supply chain partners. Here’s how it works:

Collaboration: CPFR involves sharing information and plans between retailers, distributors, and manufacturers to create a unified forecast and replenishment plan.

Joint Forecasting: Partners collaboratively develop demand forecasts based on shared data, reducing discrepancies and improving accuracy.

Replenishment Planning: Using the agreed-upon forecasts, the partners jointly plan inventory replenishment to ensure optimal stock levels and reduce stockouts or excess inventory.

Benefits: CPFR leads to improved demand visibility, better inventory management, and enhanced supply chain efficiency.

This approach fosters a cooperative relationship among supply chain partners, aligning their efforts towards meeting customer demand more effectively.

Reference: Barratt, M., & Oliveira, A. (2001). "Exploring the Experiences of Collaborative Planning Initiatives." International Journal of Physical Distribution & Logistics Management.

Seifert, D. (2003). Collaborative Planning, Forecasting, and Replenishment: How to Create a Supply Chain Advantage. AMACOM.