Buyer forecasting processes

The CPFR model has a general framework, illustrated in Fig. 4.13, by which a buyer and seller can use collaborative planning, forecasting, and replenishing processes in order to meet customer demand. To increase performance, the buyer and seller are involved in four collaboration activities that are fisted in logical order, but companies often engage in these activities simultaneously. 

Non-critical items Product standardisation Order volume monitoring/optimisation Efficient processing Inventory optimisation Good market overview Short-term demand forecast Economic order quantity inventory levels Low level (buyers)... 

The key factors that can influence the decision-making process are product specihcation, production capacity, quality, cost and time. Based on the product specihcation, the buyer will determine which product will be purchased, will select the supplier and will negotiate on the delivery terms and price. The production capacity, sales forecasting, preseason style testing, sampling, merchandise line planning and development will ultimately govern the overall procurement process. 

Within each cycle, the goal of the buyer is to ensure product availability and to achieve economies of scale in ordering. The supplier attempts to forecast customer orders and reduce the cost of receiving the order. The supplier then works to fill the order on time and improve efficiency and accuracy of the order fulfillment process. The buyer then works to reduce the cost of the receiving process. Reverse flows are managed to reduce cost and meet environmental objectives. 

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