Information leads to more effective forecasts.

More factors that predictions of future demand can take into account the more accurate predictions can be. Many supply chains are moving toward cooperative forecasting systems.

Sophisticated information systems enables an iterative forecasting process, in which all of the participants in supply chain collaborate to arrive at an agreed upon forecast.
This implies that all the components of the supply chain share and use the same forecasting tool, leading to a decrease in the bullwhip effect.

 If we consider the retail forecasts that are typically based on an analysis of previous sales at retailer. However future customer demand is clearly influenced by issues such as pricing, promotions, and release of new products. Some of the issues are controlled by retailer, but some are controlled by distributor, wholesaler, or competitors. If this information is available to the retailers forecasters the forecast obviously will be more accurate. in 1996 Warner-Lambert the consumer foods manufacturer and wall mart departmental store began pilot study of collaborative planning, forecasting and replenishment (CPFR) system. The software system facilitates collaboration in forecasting efforts between retailers and manufacturers. CPFR makes it easy to exchange drafts forecasts as well as details of future sales promotion and past sales trends. The software makes it easy for each side to review related messages and append new ones.