Make To Order - MTO

What does 'Make To Order - MTO' mean

Make to order (MTO) is a business production strategy that typically allows consumers to purchase products that are customized to their specifications. The make to order (MTO) strategy only manufactures the end product once the customer places the order. This creates additional wait time for the consumer to receive the product, but allows for more flexible customization compared to purchasing from retailers' shelves.

BREAKING DOWN 'Make To Order - MTO'

The make to order (MTO) strategy relieves the problems of excessive inventory that is common with the traditional make to stock (MTS) strategy. Dell Computers is an example of a business that uses the MTO production strategy.

RELATED TERMS
  1. Make To Assemble - MTA

    A manufacturing production strategy where a company stocks the ...
  2. Manufacturing Production

    The creation and assembly of components and finished products ...
  3. Make To Stock - MTS

    A traditional production strategy used by businesses to match ...
  4. Customer

    An individual or business that purchases the goods or services ...
  5. Back Order

    A customer order that has not been fulfilled. A back order generally ...
  6. Mass Customization

    The process of delivering wide-market goods and services that ...
Related Articles
  1. Fundamental Analysis

    Vital Link: Manufacturing And Economic Recovery

    Manufacturing output is one of the clearest signs that an economy is recovering from a recession.
  2. Professionals

    Protection Of Customer Orders

    Customer orders are required to be protected by the firm at the price that is reportable to ACT. For example, if a customer placed an order to purchase 1000 shares of GHJK at 10.00 the firm would ...
  3. Economics

    Understanding Marketing

    Marketing includes all of the activities of a company associated with buying and selling a product or service.
  4. Economics

    What's Involved in Customer Service?

    Customer service is the part of a business tasked with enhancing customer satisfaction.
  5. Brokers

    Explaining Market Orders

    A market order is the most common order used to purchase a financial security.
  6. Professionals

    Orders

    Orders
  7. Professionals

    Types of Securities Orders

    Securities Orders
  8. Fundamental Analysis

    The Importance Of Analyzing Accounts Receivable

    While investors often focus on revenues, net income, and earnings per share, they should not overlook the importance of analyzing accounts receivable.
  9. Professionals

    TYPES OF ORDERS

    Order Execution Most customer orders, which are market orders or executable limit orders, will be routed electronically to the trading post for automatic execution. The electronic system bypasses ...
  10. Forex

    Entering A Trade

    The importance of executing the correct orders
RELATED FAQS
  1. What are the similarities between product differentiation and product positioning?

    Learn how two marketing strategies, product differentiation and product positioning, are similar and work together to effectively ... Read Answer >>
  2. How does a customer base dictate goodwill?

    Find out how a customer base dictates the value of the goodwill by providing a ready market for its products and spreading ... Read Answer >>
  3. What are some ways a company can expand its product line?

    Understand what a product line is and why it's important. Learn about specific ways in which a company can expand its product ... Read Answer >>
  4. How does a merger affect the customer?

    Learn how a merger may affect customers of the industry. The effects of mergers may be positive or negative, but there's ... Read Answer >>
  5. Is there any way to reverse the law of diminishing marginal returns?

    Learn more about how consumer spending, supply and demand impact production decisions. Find out more about the law of diminishing ... Read Answer >>
  6. What's the difference between a market order and a limit order?

    Buy and sell trades with market orders at the present stock price and execute limit orders if the stock price falls within ... Read Answer >>
Hot Definitions
  1. Goodwill

    An account that can be found in the assets portion of a company's balance sheet. Goodwill can often arise when one company ...
  2. Return On Invested Capital - ROIC

    A calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ...
  3. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  4. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  5. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  6. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
Trading Center