The CPFR Process Model of Demand Forecasting

The CPFR Process Model of Demand Forecasting
CPFR (Collaborative Planning Forecasting and Replenishment) process model (Seifert, 2002).

The CPFR process model contains nine steps (VICS, 1998):

(1) Develop front-end agreement: the parties involved establish the guidelines and rules for the collaborative relationship.

(2) Create joint business plan: the parties involved create a business plan that takes into account their individual corporate strategies and defined category roles, objectives and tactics.

(3) Create sales forecast: retailer point-of-sales data, causal information and information on planned events are used by one party to create an initial sales forecast, this forecast is then communicated to the other party and used as a baseline for the creation of an order forecast.

(4) Identify exceptions for sales forecast: items that fall outside the sales forecast constraints set in the front-end agreement are identified.

(5) Resolve=collaborate on exception items: the parties negotiate and produce an adjusted forecast.

(6) Create order forecast: point-of-sales data, causal information and inventory strategies are combined to generate a specific order forecast that supports the shared sales forecasts and joint business plan.

(7) Identify exceptions for order forecast: items that fall outside the order forecast constraints set jointly by the parties involved are identified.

(8) Resolve=collaborate on exception items: the parties negotiate (if necessary) to produce an adjusted order forecast.

(9) Order generation:

 

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