Combining make to order and make to stock

In inventory control and production planning one is tempted to use one of two strategies: produce all demand to stock or produce all demand to order. The disadvantages are well-known. In the make everything to order case (MTO) the response times may become quite long if the load is high, in the make everything to stock case (MTS) one gets an enormous inventory if the number of different products is large.In this paper we study two simple models which combine MTO and MTS, and investigate the effect of combining MTO and MTS on the production lead times.