A company produces items only when a customer order is received. Which strategy group configuration in the Material Master supports this process?

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Question restatement: A company produces items only when a customer order is received. Which strategy group configuration in the Material Master supports this process?

Option 1: Make-to-Stock planning prepares inventory in advance using historical demand and forecasted sales. This approach builds inventory ahead of time based on predictions, not on actual customer orders, making it unsuitable for a process that produces only after an order is received.

Option 2: Make-to-Order planning ensures production begins only in response to sales orders from specific customers. This directly aligns with the scenario described, since manufacturing starts after a customer order is placed, avoiding finished goods inventory and supporting customization.

Option 3: Planning with Final Assembly builds inventory with general assumptions, then adjusts it based on orders. While this method uses orders to refine the final assembly, it still typically involves some pre-assembly or stocking of components, which conflicts with producing only after a customer order is received.

Option 4: Assemble-to-Order planning manufactures semi-finished components in bulk but completes them per order. This approach starts with pre-assembled subassemblies and completes final products after an order, which differs from strictly initiating production only after a customer order and may introduce some prebuilt stock rather than pure order-triggered production.

Conceptual takeaway: The key distinction is whether production is triggered strictly by a customer sale (Make-to-Order) versus pre-staging inventory (Make-to-Stock), partial pre-assembly (Assemble-to-Order), or post-order finishing with prebuilt components (Planning with Final Assembly). In the given scenario, the configuration that matches the description best is the one that initiates production solely in response to a customer order.

29:623:385:60 INTRO TO ERP Chapter 8 Quiz

A company produces items only when a customer order is received. Which strategy group configuration in the Material Master supports this process?

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