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4.1 KEY CONCEPTS AND ASSUMPTIONS > 4.1 KEY CONCEPTS AND ASSUMPTIONS - Pg. 76

76 Chapter 4. The Fulfillment Process strategies for fulfillment. Two of the most common strategies are sell-from-stock and configure-to-order. Sell-from-stock involves fulfilling customer orders directly from the company's inventory of finished goods. Basically, customers are limited to purchasing only those products that are in stock; they can't request special or customized products. Sell-from-stock is common among companies that sell directly to the consumer via retail. These tend to be high-volume, low-cost operations, such as grocery stores, office supply stores, and fashion retailers. In contrast, configure-to-order usually involves taking a standard or base model of a product and then configuring it to meet the customer's special needs by adding either special options or add-on parts. The configure-to-order strategy is common in low-volume, high-cost industries that require specialized products that must meet very specific needs. For example, companies in the chemical and the petroleum industries use similar pumps and pipes, but use them for different purposes. Consequently, they must be configured differently to meet the unique needs of each customer. The configure-to-order fulfillment process requires suppliers and customers to collaborate closely to ensure that the customer's special needs are met. The examples of the Apple iPod and Mac computer are used to illustrate the two fulfillment strategies in Business Processes in Practice 4-1. BUSINESS PROCESSES IN PRACTICE 4-1 APPLE iPOD AND MAC COMPUTERS