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...In most supply chains, the upstream activities respond to forecasts, while somewhere on the downstream side the chain waits for orders to be placed. Consider these two former fast food slogans:

• "We do it all for you!"^SM (McDonald's)
• "Have it your way!"^SM (Burger King)

Consider how McDonald's used to produce finished hamburgers "to forecast" - they didn't know when patrons would come in for lunch, but they produced burgers in anticipation. Burger King waited until patrons actually placed (customizable) orders before the burgers were produced - this is more commonly known as the "Build-to-Order" (BTO) model, while McDonalds' former strategy was called "Build-to-Stock" (BTS). Both models have benefits and drawbacks, and many companies do a combination of both.

The animation below illustrates the major differences between these strategies. Hit "play" to simulate the same order pattern of four orders to two fast food restaurants simultaneously.

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Notice that the BTO chain takes time to build the exact item ordered by the customer. As a result, it takes longer to fill each customer order. The BTS chain...