Final answer:
A firm that designs and makes products from purchased parts and materials is a manufacturer. The manufacturer both designs based on customer specifications and oversees the production process.
Step-by-step explanation:
A firm that works with a customer to design a product based on the customer's requirements and then creates the final product from purchased materials, parts, and components is described in business terms as a manufacturer. A manufacturer is involved in the process of producing goods, often deployed for sale, by combining both physical labor and machinery in the production process. When we consider the activities and decisions that encompass the behavior of a firm, we recognize that while manufacturing is the act of making things, a firm's activities also might include other value-creating processes like transportation, distribution, or retail sales. In the context of our student's question, the manufacturer would not only produce the item but may also be involved in the design phase, sourcing materials, and components from suppliers, ensuring the final product meets the customer's specifications.