Choose a make-to-stock strategy, if:

• The materials are not segregated. In other words, they are not assigned to specific sales orders.
• Costs need to be tracked at material level, and not at sales order level.

You should always use make-to-stock production if you produce stock independently of orders because you want to provide your customers immediately with goods from that stock later on. You might even want to produce goods without having sales orders, if you expect that there might be customer demand in the future. This means that make-to-stock strategies can support a very close customer-vendor relationship because your objective here is to provide your customers with goods from your stock as quickly as possible. Returns that have passed quality inspection and other unexpected goods receipts can be used for other sales orders.

This does not mean that you have unreasonably high stock levels. You can avoid them by doing one of the following:

• Create a production plan in advance (in Demand Management) to plan your stock.

• Receive sales orders relatively early on (using scheduling agreements, for example).

You can automate the planning stage by passing the results of the forecast, flexible planning, or SOP directly to Demand Management. For more information, see Transfer to Demand Management in the R/3 Library under Sales and Operations Planning (PP-SOP).

In a make-to-stock environment, smoothing of production can be an important feature. This means irregular requirements flow resulting from different customer requirements quantities can be smoothed and simply produced to stock.

Make-to-stock strategies are usually combined with a lot-size key or a rounding value. For instance, you may want to produce the entire amount for the whole month once a month only, or you may want to produce full pallets only. In the following sample scenarios, the lot-size key is always EX for easier understanding.

No specific product structures are required for make-to-stock strategies. In other words, the material may or may not have a BOM. The material can be produced in-house or it can be procured externally.