Consider a business that can be run using a make-to-stock or make-to-order process. Further suppose that your demand is 10000 per month and is spread out during the month. Capacity of both processes is 15000 per month.Based only on this information, what would be the best choice?
A)Choose Make-to-stock process.
B)Choose make-to-order process.
C)Either A or B.
D)Both A and B
E)None of the above.

Question

Quizplus · Accepted Answer

Since the demand is spread out during the month, it is not feasible to produce everything beforehand and store it. Therefore, choosing the make-to-order process would be the best option. This way, the business can produce products as per the demand received and avoid the risk of overproduction or underproduction. Additionally, with a capacity of 15000 per month, the business can easily cater to the demand of 10000 per month via the make-to-order process. Therefore, option B is the best choice.

Consider a Business That Can Be Run Using a Make-To-Stock