Chapter 6

Form Utility = Making a product or service more attractive to potential and actual users so that
demand is created.

Economies of Scope = Processes which can create a range of products.

Machine Flexibility = Flexible machines staffed by workers provide the ability to produce different
types of products.

Routing Flexibility = Provides managers with a choice of machines for a part’s next operation.

Offshoring = Manufacturing in another country to a contract manufacturer.

Capacity Planning = Determining the appropriate production levels that the company is capable of
completing.

Materials Planning = Balance of future supply and demand planning.

ATO BTO ETO

Level of customization Limited Moderate Total
Cost of finished goods Moderate High Very High
Order fulfillment Days to weeks Weeks to months Months to years
speed
Production process Moderate High Extreme
complexity
Example products Personal computers, Computer servers, Nuclear Power plant,
cars Private jets Football Stadium

ATO = Assemble to Order

BTO = Build to Order

ETO = Engineer to Order