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Q.11DQ

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Operations And Supply Chain Management
Found in: Page 476
Operations And Supply Chain Management

Operations And Supply Chain Management

Book edition 14th
Author(s) F. Robert Jacobs
Pages 800 pages
ISBN 9780078024023

Short Answer

Question: What sorts of risks do you see in reliance on the Internet in the use of Collaborative Planning, Forecasting, and Replenishment (CPFR)?

Answer

Collaborative planning, forecasting, and replenishment (CPFR) may be a web-based tool accustomed coordinate demand forecasting, production and buy planning, and inventory replenishment between supply chain trading partners.

See the step by step solution

Step by Step Solution

Step 1: Collaborative Planning, Forecasting, and Replenishment (CPFR)

(CPFR) is getting used as a technique of integrating all members of an n-tier supply chain, including manufacturers, distributors, and retailers. CPFR is the retail-level demand forecast. Which is successively accustomed synchronize forecasts, production, and replenishment plans upstream through the provision chain.

Step 2:  Web-based forecasting

The main objective is to exchange selected internal information on a shared webserver to supply reliable, longer-term future views of demand within the supply chain. CPFR uses a cycle and iterative approach to derive consensus supply chain forecasts. It consists of the subsequent five steps:

  1. Creation of a front-end partnership agreement
  2. Joint business planning
  3. Development of demand forecasts
  4. Electronically sharing forecasts
  5. Inventory replenishment

Step 2: Risks involved in reliance on the Internet in the use of Collaborative Planning, Forecasting, and Replenishment (CPFR)

  1. As with the foremost new corporate initiatives, there's skepticism and resistance to vary.
  2. One of the biggest hurdles hindering collaboration is a lack of trust over complete information sharing between supply chain partners.
  3. Sharing sensitive operating data may enable one trading partner to take advantage of the opposite party. There's the potential loss of control as a barrier to implementation.
  4. Some companies are rightfully concerned about the thought of placing strategic data like financial reports, manufacturing schedules, partnership agreements, non-disclosure agreements, and limited information access may help overcome these fears.

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