Henkel1. What are the specific problems forcing Henkel to consider CPFR?Henkel needs to meet service level at 99.8%. To achieve at that level, Henkel have to have accurate sales forecasting system. Continuous replenishment program (CPR) cannot provide a long forecasting horizon. Thus, adopting of Collaborative Planning, Forecasting, and Replenishment (CPFR) would help manage retail promotions and limit their impact on the stock-outs and obsolete inventory.2. What are some of the symptoms? What are the root causes of those symptoms?1) The stock keeping units (SKU) have almost tripled in five years because of new product launches, brand variations, and special product packaging.2) The sales are up but net earnings are down because of a difficult economic environment. 3) The skyrocketing of production costs and over- or under- stocks because of lacking of viable long-range forecasts.3. Should Henkel reduce product complexity, perhaps by adopting an everyday low price (EDLP) strategy? Or, should they continue to offer new products and promotions while implementing CPFR or another initiative?They should continue to offer new products and promotion while implementing CPFR or another initiative. Henkel uses special promotions, instead of straight price promotions, such as more product for the same price, specially bundled products, and coupons or free items attached to the package. These promotions are retailer-specific, therefore there is a need for a wide variations of different kind of packaging. 4. What are the implications of these different approaches on raw material costs, inventory related costs, profit margins, etc.As for an offering new products and promotion, Henkel have to stock a lot of material, the reason is to produce high amount of product to serve retailer while running a promotion. They could buy raw materials at low price because they have to hold