Developing Causal Relationships for CPFR Index: A System Dynamics Simulation Approach

Abstract

Collaborative planning, forecasting and replenishment (CPFR) is one of the collaborative strategies in supply chain management that aims to coordinate the diverse processes of supply chain management. Despite being identified as playing an important role in supply chain performance improvement, the dynamic interactions among its subsystems have not been explored in previous research. This research aims to identify the interactions among effective enablers and the potential impact of each enabler on successful CPFR implementation through the development of a structural model and system dynamics simulation modelling. To reach this goal, significant enablers and results reported in previous research have been explored. The causal relationships among different variables have been analysed using through the application of system dynamics and stock and flow diagrams. A dynamic CPFR model is proposed based on a number of assumptions. The resulting causal loop helps the reader to better understand and learn the dynamic interactions of CPFR subsystems. 