Consider a business that can be run using a make-to-stock or make-to-order process. Further suppose that your demand is 10,000 per month and is spread out during the month. Capacity of both processes is 15,000 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) Install an assembly line.
D) Raise prices in order to increase demand.
E) None of these choices are correct.

Question

Quizplus · Accepted Answer

Since demand is spread out during the month and capacity of both processes is greater than demand, it would be better to choose a make-to-order process. This would allow for greater customization and reduce the risk of excess inventory. Additionally, installing an assembly line or raising prices are not viable options based on the given information.

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