Make To Stock - MTS

DEFINITION of 'Make To Stock - MTS'

A traditional production strategy used by businesses to match production with consumer demand forecasts. The make-to-stock (MTS) method forecasts demand to determine how much stock should be produced. If demand for the product can be accurately forecasted, the MTS strategy can be an efficient choice.

BREAKING DOWN 'Make To Stock - MTS'

The main drawback to the make-to-stock (MTS) method is that it relies heavily on the accuracy of demand forecasts. Inaccurate forecasts will lead to losses stemming from excessive inventory or stockouts. Common alternative production strategies include make-to-order (MTO) and assemble-to-order (ATO).

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