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CMA Intermediate · Operations Management and Strategic Management · Production Planning and Control

A firm uses a make-to-stock approach for a fast-moving consumer product with stable demand. Which production planning feature best suits this approach?

Make-to-stock means producing in anticipation of forecast demand and holding finished goods inventory, which suits fast-moving products with stable demand. Customers are served quickly from stock, unlike make-to-order, where production starts only after a specific customer order is received.

  1. AProducing only after a firm customer order with unique specifications
  2. BProducing in anticipation of forecast demand and holding finished goods inventoryCorrect
  3. CUsing a fixed-position layout where the product never moves
  4. DStarting work only when the customer deposits full advance payment

Explanation

Make-to-stock relies on demand forecasts: goods are produced ahead and stored to serve customers quickly. Option A describes make-to-order or job production, which suits customised items, not stable fast-moving goods. The other options concern layout and payment, not the planning approach.

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