Finschool By 5paisa

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When an order is verified, items are promptly assembled from component parts under the business approach known as “assemble-to-order” (ATO).

Make-to-order and make-to-stock are combined in assemble-to-order.

In a conventional ATO approach, the costs of creating the many components can be high compared to the price of assembling the product from its parts.

An assemble-to-order technique is used by a PC manufacturer who takes orders and then assembles customisable computers from parts including keyboards, displays, and motherboards.

A mixture of the make-to-stock strategy (MTS) and the make-to-order strategy is the assemble-to-order approach (MTO). When using a make-to-stock technique, all of the product is made up front. The goal is to create an inventory that corresponds to projected or guessed consumer demand. The steps in this process would be to set a production level, accumulate inventory, and then try to sell as much assembled product as you can. It is primarily used for high-volume products, consumables, and commodities that can be purchased individually or in large quantities.

Making things when customers order them is known as a “make-to-order” technique. Demand drives production, and products are only made after verified orders. To put it another way, the supply chain activity doesn’t start until there is sufficient proof of client demand. For high-end products or commodities produced in small batches or individually, this tactic is frequently used.

The ATO strategy aims to combine the advantages of both make-to-order and make-to-stock by delivering goods to consumers promptly while enabling the product to be customized or updated in specific ways in response to client requests. The majority of the time and money required to assemble the product from its constituent parts is very little.

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