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ALLIANCE SUPERMARKET3Seasonal Demand Safety stocks are often created just before the season begins, and the speed at which these are used up can vary in different stores according to local conditions, such as the weather or customer preferences. (Smaros, 2012, p.5) The order forecast automatically considers demand and stock on hand in each individual store, which means that demand can be met while maintaining an overview of the total supply need. Towards the end of the season, the order forecast makes it easier to ramp down the products effectively as well as identifying potential overstock items in the supply chain (Smaros, 2012, p.5)Collaborative Planning, Forecasting, and Replenishment (CPFR)CPFR (pronounced C-P-Far) requires that all supply chain parties be committed to the plans developed jointly and that they be committed to updating the plan on a regular basis. The company will share information about demand forecasts and planned product promotions with the suppliers as they share information about possible limitations for inventory replenishment, for example periods during which production facilities may be shut down. (Vonderembse & White, 2013, Chapter Five, Section Three, “The Role of Information Sharing”, para.4)Forecast Accuracy: Refining POS Data According to Vonderembse & White (2013), simply realizing that forecasts are likely to be inaccurate can lead to improving supply chain management. By refining POS data for order forecasts, the company reduces the uncertainty and the need for interpretation within the supply chain, while improving response time (Smaros, 2012, p.2)
ALLIANCE SUPERMARKET4Smaros (2012) indicated that the order forecast provides the best possible estimate of when and to what extent an order need will occur in each individual store or warehouse. A good order forecast combines three different types of information: (1) The end-customers’ predicted demand, updated on the basis of the latest POS data, (2) stock on hand and replenishment orders