Made to Stock (MTS)

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Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades.

Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers. While there, Paul authored and edited thousands of financial research briefs, was published on Nasdaq. com, Yahoo Finance, and dozens of other prominent media outlets, and appeared as a guest expert at prominent radio shows and i...

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Updated August 5, 2020

What is Made to Stock (MTS)?

Made to Stock (MTS) is a production and inventory strategy in which companies manufacture products or provide services according to their forecast of customer demand.

How Does Made to Stock (MTS) Work?

Let's say Company XYZ produces widgets, which are popular Christmas presents. Because retailers often buy thousands more widgets in August, in preparation for the holiday season, Company XYZ manufactures triple the amount of widgets in July to fulfill these orders. Company XYZ is using an MTS approach.

Why Does Made to Stock (MTS) Matter?

Companies that provide MTS products and services create competitive advantages by providing what other companies cannot -- more product or service at a crucial time. However, the MTS approach costs much more because companies must retool, redesign or ramp up production processes at certain times rather than operate at an even keel all year. This in turn often means that customers pay more but get product when they want it. This creates a competitive disadvantage because sometimes this means they must pay more, though this is easily overcome if the companies in the sector are competing on service and timing rather than price. Of course, being wrong about demand forecasts can also be an expensive mistake.

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At InvestingAnswers, all of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Made to Stock (MTS).
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