Determining semi-finished products to be stocked when changing the MTS-MTO policy: Case of a steel mill

A practical problem of make-to-stock (MTS) or make-to-order (MTO) is described. The case company is a small MTO steel mill planning to move towards a hybrid MTS/MTO-system. A decision process is presented, where determining the semi-finished items to be stocked plays a critical role. The complexity of the problem is illustrated with examples. The main features of an appropriate approach needed in this type of decision making context are presented.