Although the initial benefits of CRP were reductions in inventory, stockouts, and handling
and transportation costs, increased adoption of CRP by P&G customers offered dramatic cost saving
opportunities for production and raw-material purchasing. P&G managers estimated that at least
10% of the cost of production for paper products was the cost of excess capacity required to handle
product demand variations. Value pricing reduced demand uncertainty by eliminating forward-buy
distortions, and CRP further reduced demand uncertainty and allowed almost instant feedback on
demand resulting from product innovations or pricing changes.