Final answer:
Assemble-to-order production typically requires a medium planning horizon, balancing the need for customized production with efficient inventory management and benefiting from economies of scale up to a certain output level.
Step-by-step explanation:
Assemble-to-order production usually operates on a medium planning horizon. This production strategy allows companies to offer customized products without the need to keep large inventories of finished goods. By keeping parts and components on hand, companies can quickly assemble products according to customer specifications after an order has been received, which can lead to a more mechanized work environment where design enhancements and technological investments, such as the assembly line, play significant roles.
Historically, large-scale producers have gained an advantage through economies of scale, reflected in the downward-sloping portion of the long-run average cost curve.
This suggests that production costs per unit decrease as the quantity of output increases up to a certain point, beyond which diseconomies of scale might set in, leading to increased average costs as scale continues to rise. An example of this can be observed in global production strategies, such as Apple's assembly process involving international transactions.