Which of the following situations is characteristic of a make-to-stock environment?
A) Work in process (WIP) represents the largest cost of inventory.
B) The impact of technology on the production process will be large.
C) The master schedule is stated at the finished product level.
D) Customer involvement is typically very high.

Question

Quizplus · Accepted Answer

In a make-to-stock environment, the master schedule is stated at the finished product level in order to ensure that sufficient inventory is available to meet customer demand. Option A is characteristic of a make-to-order environment where inventory costs are low as products are produced only when ordered. Option B may apply to any production environment, as technology can impact production processes regardless of the production strategy. Option D is more likely to be characteristic of a make-to-order or engineer-to-order environment where customer involvement is high due to customization requirements.

Which of the Following Situations Is Characteristic of a Make-To-Stock