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
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.
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