Moving from engineer-to-order (ETO) to assembled-to-order (ATO) usually increases which of the following costs per...

Definitions:

Engineer-to-Order (ETO): Products are designed and built to customer specifications after the order is received.

Assemble-to-Order (ATO): Products are assembled from pre-existing components after receiving an order.

Inventory Implications: Moving from ETO to ATO requires maintaining an inventory of components and subassemblies that can be quickly assembled into final products.

Increased Costs:

Inventory Costs: Increased because components need to be stocked to facilitate quick assembly.

Comparison with Other Costs:

Transportation (A): Costs per unit generally remain unaffected by the move from ETO to ATO.

Manufacturing (C): Manufacturing costs per unit typically decrease due to standardized components.

Procurement (D): Procurement costs might be streamlined due to bulk buying of components but do not necessarily increase per unit.

Conclusion: The shift to ATO usually increases inventory costs per unit due to the need for maintaining a stock of components.

References

"Manufacturing Planning and Control for Supply Chain Management" by Thomas E. Vollmann, William L. Berry, and David C. Whybark.

APICS Dictionary, 16th Edition.