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Clarification on Contract Manufacturing Process.

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Hi Team - We are setting up MTO Contract manufacturing scenario. we have created two org OEM and CM org for our testing. 

Q1) As mentioned in the link - PDF page 11, the contract manufacturer can ship the finished good after work order completion to OEM or directly to end customer, so how the contract manufacturer will know whether to ship to OEM or to end customer after completing the work order? Is it via the "ship to location" on service PO which OEM will send to the contract manufacturer? Or this communication happens offline with Contract Manufacturer.

Q2) The flow we are doing now is , after submitting the sales order, GOP is brining the CM org on sales order as ship from warehouse, work order is created in CM org and once the work order is finished the onhand of FG is increased in CM org and we pick and ship the sales order from CM org. So this flow is the replica of where CM org directly ships the finished good to end customer? correct? 

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