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Make-to-order (MTO) manufacturing has been defined as “a production environment where a product or service can be made after receipt of a customer's order. The final product is usually a combination of standard items and items custom designed to meet the special needs of customer (APICS, 1995: 46).” Thus, MTO firms essentially sell the capability to custom design and produce a certain set of products. Some MTO firms experience less demand than capacity, an average. For such firms, order backlog management, operations scheduling, and lead-time determination constitute three primary areas of concern. Other MTO firms experience demand greater than capacity. Their major concern is capacity management. See Bertrand and Sridharan (1998)for specific examples of such firms. In some cases, capacity expansion is often not an economically viable option due to the already high fixed-to-variable cost ratio and/or the need for a highly skilled labor force. Further, when demand exceeds...
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© 2000 Kluwer Academic Publishers
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Sridharan, V. (2000). CAPACITY MANAGEMENT IN MAKE-TO-ORDER PRODUCTION SYSTEMS . In: Swamidass, P.M. (eds) Encyclopedia of Production and Manufacturing Management. Springer, Boston, MA . https://doi.org/10.1007/1-4020-0612-8_123
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DOI: https://doi.org/10.1007/1-4020-0612-8_123
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