Free Preparation Discussions
MENU
APICS CSCP Exam - Topic 2 Question 120 Discussion
Topic #: 2
Which of the following manufacturing strategies would run the greatest risk of increasing obsolete inventory costs?
Make-to-stock (MTS) is a manufacturing strategy where products are produced based on anticipated customer demand and then held in inventory until sold. The primary risk associated with MTS is the possibility of overestimating demand, which can lead to excess inventory. If the forecasted demand does not materialize, the unsold inventory may become obsolete, leading to increased costs associated with storage, depreciation, and potential disposal. In contrast, the other strategies---assemble-to-order (ATO), make-to-order (MTO), and engineer-to-order (ETO)---are more demand-driven, producing goods in response to actual customer orders, thus reducing the risk of holding obsolete inventory. Reference:
Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation. Pearson.
Stevenson, W. J. (2021). Operations Management. McGraw-Hill Education.
Ashleigh
2 months agoLeontine
2 months agoRozella
3 months agoWilbert
3 months agoFrederic
3 months agoParis
3 months agoLyndia
3 months agoFranklyn
3 months agoElinore
4 months agoMeghann
4 months agoFlorinda
5 months agoDino
5 months agoJennifer
5 months agoStephaine
5 months agoKina
5 months agoGeorgene
5 months agoPete
6 months agoSuzan
6 months agoSerina
6 months agoCassie
6 months agoKristal
6 months agoDarci
6 months agoLigia
12 days agoTamar
2 months agoFiliberto
2 months ago