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.

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  6. Make To Stock - MTS

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