To Stock Or Not To Stock? That’s The Question – A Starter’s Guide To Operations Management

Make-to-stock (MTS) is a traditional production strategy that is used by businesses to match production and inventory with consumer demand forecasts. The MTS method requires an accurate forecast of demand in order to determine how much stock should be produced.

Make-to-order, also referred to as build to order (BTO), is a manufacturing process in which the production of an item begins only after a confirmed customer order is received.

 

Key Takeways

1. Make-to-Stock and Make-to-Order are production strategies based on customization and inventory.

2. For implementing Make-to-Stock it is necessary to have a reliable demand forecast.

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