Part 1- Decoupling Points in Food Manufacturing

What are the best practices for determining whether an item should be make-to-order (MTO) or make-to-stock (MTS)?  Is it better to hold finished goods inventory to react to customer demand or is it better to hold packaging and raw materials with a flexible production schedule to keep working capital down?

It my experience, food manufacturers typically produce in large batches to keep production costs down and optimize plant utilization.  Most items are MTS to assure there is adequate inventory to meet customer service delivery requirements.  The only items that are typically MTO are specialized items for export or military customers, due to shelf life requirements or intermittent demand. But perhaps more than just these difficult items should be MTO.