Which statement best describes make-to-stock production?

• A. Make-to-stock produces finished goods for inventory.
• B. Make-to-stock produces only after a customer order.
• C. Make-to-stock focuses on mass customization.
• D. Make-to-stock eliminates forecast planning.

Answer: (A)

Make-to-stock centers on producing finished goods in advance and stocking them so they’re ready to ship when orders come in. This approach hinges on forecasting demand and building inventory of standard items, which allows quick fulfillment and shorter lead times for customers. That’s why the statement describing make-to-stock as producing finished goods for inventory is the best fit. Producing only after a customer order describes make-to-order, not make-to-stock. Mass customization implies tailoring products to individual needs rather than stocking standard finished goods, so it doesn’t align with MTS. Forecast planning is essential in MTS to decide what and how much to produce for inventory, so the idea of eliminating forecast planning doesn’t fit.