The model was created and rendered with Autodesk Maya. I ran a cloth simulation for the bedsheet draped over the girl, and a fur simulation on the bear.
The bear's fur was created with Maya's hair simulation tool. There were a small number of control hairs that were used to give direction to the 300,000 hairs created by the simulator. The hairs were curled to give a little fluff to the bear. I'd never run a hair simulation like this before and it was certainly a learning experience. Even the settings I ended up using were a little inefficient.