Build to stock (BTS) is a strategy employed when the lead time to the customer is shorter than the lead time to build the item. In this case, the item is built based on an assumption of customer demand. This approach is often used for fast-moving items with relatively stable demand.
There are several advantages to using a BTS strategy. First, it can help ensure that customer demand is met since items are produced based on estimated demand. Second, it can help to reduce inventory levels since items are only made as needed. Finally, it can help reduce lead times since items are not produced until an order is received.
There are also some disadvantages to using a BTS strategy. First, it can lead to stock-outs if demand is higher than expected. Second, it can be costly if demand is lower than anticipated and inventory levels need to be reduced. Finally, it can be challenging to change production plans quickly if demand changes unexpectedly.
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