Question $1$

Read the following case and answer the questions

Ikea is the world's largest home furnishing retailer, which has $298$ stores in $37$ countries. The company designs products that incur low manufacturing costs. It seeks to use as few materials as possible to make the furniture, without compromising on quality or durability. It buys products from more than $1,800$ suppliers in $50$ countries and uses $42$ trading service offices around the world to manage supplier relationships. They negotiate prices with suppliers, check the quality of materials, and keep an eye on social and working conditions. Although IKEA fosters competition among suppliers to ensure they attain the best prices and materials, it believes that making long$-$term business relationships is also important.

Most IKEA furniture is designed and sold in pieces. The pieces are placed into convenient and efficient, flat packages for low$-$cost transport because they take up less room in trucks, maximizing the number of products that can be shipped. The unique packaging also takes up less space in warehouse bins and reserve racks, allowing for more room to stock additional items for order fulfilment. Due to vertical integration, IKEA produces "make$-$to$-$stock". This strategy comes with many advantages on the one hand, but also with some risks on the other. The company has taken the concept of manufacturing postponement to an extremely high level, where final assembly of many furniture items occurs in people's houses.

Every IKEA store has a warehouse on the premises. On the main showroom floor, customers can browse for items. They then obtain the products themselves from the floor pallet location with racking as high as the typical person could reach, where furniture can be purchased and taken home. All products in IKEA retail stores are kept in semi$-$finished form. Using IKEA's proprietary inventory system, logistics managers know what is sold through point$-$of$-$sale $($POS$)$ data and how much inventory comes into the store through direct shipping and from distribution centers through warehouse management system data. From this data, they can forecast sales for the next couple of days and order in the suitable number of products to meet that demand. If the sales data doesn't match the projected number of items that should have been sold that day, the logistics manager goes directly to the pallet to manually count the product stock.

Adapted from Ivanov, D$.,$ Tsipoulanidis, A$.,$ & Sch$$nberger$,$ J$.(2019).$ Global supply chain and operations management: A decision$-$oriented introduction to the creation of value $($Vol$.2).$ Cham, Switzerland: Springer International Publishing.

a$.$ Evaluate the make$-$to$-$stock approach, by describing its advantages and possible limitations$.$

b$.$ Describe the term "manufacturing postponement", and explains how such production practice helps in "make$-$to$-$stock" process strategies in the context of IKEA.