What is Make-to-Order (MTO)?

What is Make-to-Order (MTO)?

• A. Products are only made after an order is received
• B. Forecast-based production
• C. Assemblies are built ahead and held
• D. Engineering changes requested

Answer: (A)

Make-to-Order means production starts after a customer order is received, so manufacturing is driven by actual demand rather than forecasts. This approach minimizes finished-goods inventory and often allows for customization because each order can specify different specifications. Because you wait for the order and then begin sourcing materials and production, lead times are typically longer than for products produced in advance. In contrast, forecast-based production uses anticipated demand to build products ahead of time, and assemblies built ahead and held refers to keeping pre-made components or products in stock. Engineering changes requested aren’t a production method themselves; they’re modifications that can occur during or after development.

Make-to-Order means production starts after a customer order is received, so manufacturing is driven by actual demand rather than forecasts. This approach minimizes finished-goods inventory and often allows for customization because each order can specify different specifications. Because you wait for the order and then begin sourcing materials and production, lead times are typically longer than for products produced in advance. In contrast, forecast-based production uses anticipated demand to build products ahead of time, and assemblies built ahead and held refers to keeping pre-made components or products in stock. Engineering changes requested aren’t a production method themselves; they’re modifications that can occur during or after development.