Manufacturing Production


DEFINITION of 'Manufacturing Production'

The creation and assembly of components and finished products for sale. Three common types of manufacturing production are make-to-stock (MTS), make-to-order (MTO) and make-to-assemble (MTA).

BREAKING DOWN 'Manufacturing Production'

The MTS strategy is based on demand forecasts, so it makes the most sense when demand can be predicted with reasonable accuracy. Companies can lose money with this strategy if they manufacture too much or too little.

MTO allows customers to order products built to their specifications. Companies alleviate inventory problems with MTO, but customer wait time is usually longer.

MTA is a hybrid of the two: companies stock basic parts based on demand predictions, but do not assemble them until customers place their orders and can offer customization.

  1. Capacity Requirements Planning ...

    An accounting method used to determine the available production ...
  2. Cost Of Revenue

    The total cost of manufacturing and delivering a product or service. ...
  3. Production Rate

    In manufacturing, the number of goods that can be produced during ...
  4. Make To Assemble - MTA

    A manufacturing production strategy where a company stocks the ...
  5. Make To Order - MTO

    A business production strategy that typically allows consumers ...
  6. Make To Stock - MTS

    A traditional production strategy used by businesses to match ...
Related Articles
  1. Stock Analysis

    Who Will Be the Tesla of the Airline Industry?

    Explore the move toward producing electric-powered airplanes and learn what companies are in the forefront for developing the necessary technology.
  2. Stock Analysis

    What's the Secret Behind Ambarella's Success?

    Learn more about Ambarella, and understand some the primary reasons behind the company's continuing high level of growth and success.
  3. Fundamental Analysis

    Vital Link: Manufacturing And Economic Recovery

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

    Overseas Investing No Protection Against Downturn

    The U.S. economy affects many other countries. Find out what this can mean for overseas investments.
  5. Investing

    Doing More With Less: The Sales-Per-Employee Ratio

    If used properly, this ratio can give you insight into a company's productivity and financial health.
  6. Investing Basics

    The Biggest IPO Flops

    Even with the uncertainties of IPOs, companies will keep issuing them in efforts to grow their enterprises, and some will end in disaster.
  7. Economics

    What are Acquisition Costs?

    A company can recognize acquisition costs as those costs used to buy property and equipment.
  8. Investing News

    Hearst and Condé Nast in the Digital Age

    Condé Nast and Hearst are converting potential loss into opportunity by adapting to the digital age and transforming their products and operations.
  9. Investing

    How To Create a Winning Elevator Pitch

    Whether you are talking to potential investors, partners, customers or employees, the skill of being able to concisely summarize your business is critical.
  10. Stock Analysis

    Behind Verizon's Decision to Change Its Plan Model

    Take a look at Verizon's new cellphone service plans, and learn about what is behind Verizon's decision to make a major change in its service delivery.
  1. How does the risk of investing in the industrial sector compare to the broader market?

    There is increased risk when investing in the industrial sector compared to the broader market due to high debt loads and ... Read Full Answer >>
  2. What is usability testing, and why is it so important in the Internet sector

    Usability testing is the evaluation of a product or service by testing it with users who represent the consumer segment the ... Read Full Answer >>
  3. Who are Tesla's (TSLA) main suppliers?

    A relative newcomer to the automotive sector, Tesla Motors (TSLA), headquartered in California, is an auto manufacturer and ... Read Full Answer >>
  4. What are some of the most prominent companies in the electronics sector?

    The electronics industry is part of the technology sector. This sector covers companies that are responsible for researching, ... Read Full Answer >>
  5. Why are microeconomic models different in the short run than the long run

    In microeconomics, the short run and long run refer to two very different perspectives on the production process and costs. ... Read Full Answer >>
  6. What are the primary advantages of forming a joint venture?

    As an alternative to a business merger or acquisition, forming a joint venture is a common business strategy used among companies ... Read Full Answer >>
  7. What's the difference between outsourcing and insourcing?

    The primary difference between outsourcing and insourcing is the method in which work is divided between various companies ... Read Full Answer >>
  8. Does gross profit include labor and overhead costs?

    Companies calculate gross profit by deducting the expenses directly related to the production of their goods (listed as "cost ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Purchasing Power

    The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing ...
  2. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  3. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  4. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
  5. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  6. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!