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Contract manufacturing and toll manufacturing are business models used by companies for production. Contract manufacturing involves a company outsourcing the production of its products to another manufacturer based on a contract, which specifies the quantity and duration. This can be part of a company's core operations or a transitional step to in-house production. In contrast, toll manufacturing allows a company to send its raw materials to a manufacturer, who then processes those materials into finished products. Both methods provide companies with flexibility in production, enabling them to focus on other aspects of their business while leveraging the expertise and facilities of external manufacturers.
