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Which of the following statements is most accurate about build-to-order (BTO) manufacturing?

a. BTO involves manufacturing products only when a customer places an order.
b. BTO manufacturing leads to an increase in work-in-process inventories.
c. BTO manufacturing increases delivery times to customers since factories are usually not located near most customers.
d. BTO manufacturing, such as the process Apple uses, allows firms to offer many different models for their products.

1 Answer

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Final answer:

The most accurate statement about build-to-order manufacturing is that it involves manufacturing products only when a customer places an order, which allows for customization and reduces inventory costs.

Step-by-step explanation:

The most accurate statement about build-to-order (BTO) manufacturing is that it involves manufacturing products only when a customer places an order. In BTO, the production process is initiated only after the receipt of a customer's specific order. This leads to high levels of customization and can reduce inventory costs for the manufacturer. BTO is fundamentally different from just-in-time (JIT) manufacturing, which focuses on having the right amount of components just as they are needed for the production process. BTO does not traditionally result in increased work-in-process inventories; in fact, it usually reduces them because products are not made in advance. Moreover, BTO does not necessarily increase delivery times. While it may take longer to receive a customized product than an off-the-shelf item, the delivery time is heavily dependent on the manufacturer's efficiency and the location of the production facilities. Lastly, BTO allows for customization but does not inherently allow firms to offer many different models, as that is more about product design flexibility than the manufacturing process itself.

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