Make-to-Order

A system in which the product being manufactured will only be made after an order has been placed. This process reduces the likelihood of the products over-accumulating as inventory and facilitates JIT production and distribution. Custom parts may be required and as a result will likely increase the price of the product. The consumer’s willingness to pay a premium for these goods and the extended time from manufacturing time required for the product are generally weighed in the cost/benefits analysis of make-to-order production. Make-to-order is also method of reducing costs in inventory management by reducing stock increases.

« Back