What does delayed differentiation involve?

Delayed differentiation is a strategy used in operations management where a company postpones the final steps of production until customer preferences are understood. This means that products are manufactured up to a certain point, but they remain in an incomplete state until an order is received. Once customer preferences or specifications are clear, the company finalizes the product based on this information.

This approach allows for greater flexibility and responsiveness to customer demands, reducing the risk of overproduction and excess inventory of finished goods that may not meet customer desires. By delaying the final assembly or customization phase, a business can better match its output to actual market demand, thereby enhancing customer satisfaction and potentially improving profitability.

In contrast, the other choices revolve around scenarios that do not effectively capture the essence of delayed differentiation, such as producing final products without any customer insight or relying on forecasts without adjustment to actual customer preferences.