Final answer:
CPFR stands for Collaborative Planning, Forecasting, and Replenishment, which is a supply chain management practice involving joint efforts between trading partners to improve efficiency and reduce costs. It includes sharing information about forecasts and inventory to ensure better supply chain coordination.
Step-by-step explanation:
The abbreviation CPFR stands for Collaborative Planning, Forecasting, and Replenishment. CPFR is a business practice within supply chain management where multiple trading partners engage in joint planning and forecasting to streamline supply and demand. The process involves sharing forecast and inventory data to optimize the supply chain and reduce costs. CPFR aims to improve supply chain efficiency by supporting and assisting real-time coordination between partners, which can lead to more accurate inventory levels, better customer service, and higher sales revenues.
It is a consensus-driven process that requires collaboration between suppliers and retailers. This practice can be highly beneficial in environments where products have a limited shelf life, like in the food and fashion industries, where overstocking or understocking can lead to significant losses. With CPFR, businesses can create a more agile and responsive supply chain that can quickly adapt to changes in market demand.