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Questions and Answers
What is the primary objective of increasing production quantity when customer orders exceed forecasted quantity?
What type of production planning strategy is used when producing a finished good based on a forecast?
What happens when customer orders exceed the forecasted quantity in a make-to-stock production strategy?
Which of the following is NOT a characteristic of make-to-stock production?
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What is the potential consequence of not increasing production quantity when customer orders exceed forecasted quantity in a make-to-stock production strategy?
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Study Notes
Production Planning Strategy
- The company produces a finished good based on a forecast and holds it in stock until customers place orders.
- When customer orders exceed the forecasted quantity, the production quantity is increased to attempt to meet the additional demand.
- The production planning strategy used in this scenario is Make-to-Stock production.
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Description
Identify the correct production planning strategy based on customer orders and forecasted quantities. Choose the correct answer to determine whether to produce to order or to stock.
