Question

A CPFR program allows a producer to determine replenishment quantities in concert with a retailer and thereby remove redundant inventory and improve customer service. This activity likely ______________.

a.worsens the bullwhip effect
b.mitigates the bullwhip effect
c.has no effect on the bullwhip
d.none of the above

Answer 1

A CPFR program, which stands for Collaborative Planning, Forecasting, and Replenishment, allows a producer to work together with a retailer to determine replenishment quantities and improve customer service. It is likely to mitigate the bullwhip effect by reducing the need for excess inventory and minimizing the impact of demand fluctuations.

Step-by-step explanation:

A CPFR program, which stands for Collaborative Planning, Forecasting, and Replenishment, allows a producer to work together with a retailer to determine replenishment quantities. This collaboration helps to remove redundant inventory and improve customer service. In terms of the bullwhip effect, which is the amplification of demand fluctuations as one moves up the supply chain, a CPFR program is likely to mitigate the bullwhip effect. By sharing more accurate and timely information, the producer and retailer can make more informed decisions, reducing the need for excess inventory and minimizing the impact of demand fluctuations.