ENTREPRENEURIAL OPERATIONS
SUPPLY CHAIN MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Make a product when a customer places an order
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Make and stock products in anticipation of customer demand
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Either A or B
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None of the above
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Detailed explanation-1: -What is Make-to-Stock? Make to stock (MTS) is a manufacturing approach in which items are produced in anticipation of customer demand. The goal of make to stock is to have items available when the customer wants them. It further reduces lead times and ensures that customer orders can be filled quickly.
Detailed explanation-2: -Sometimes, in anticipation of events that will or might occur, businesses purposely keep more inventory than needed to meet current demands. This inventory is called anticipation inventory.
Detailed explanation-3: -Make to stock relies on reliable forecasts of demand. For example, a fashion company may require demand forecasts for a shoe design broken down by size, color and style variation. When a forecast is off, a color or size ends up overstocked.
Detailed explanation-4: -Make-to-order is a viable strategy when the products you’re manufacturing are complex, with many customizable features for your customers. Make-to-stock is a viable strategy when there isn’t much variation between the products you manufacture and little customization on orders.