3.4 - Operational Management

Question 1

What is operations management?

Answer 1

Managing the process of converting inputs into outputs/ transforming resources into goods and services.

Question 2

What decisions does operations management involve?

Answer 2

• The level of output the business needs to be able to produce
• The range of products offered by the business
• The level of customer service offered by the business
• How flexible a business wants to be in relation to customer demands.
• Labour intensive or capital intensive?
• Direct distribution or using intermediaries?
• Use of suppliers or own manufacturing?

Question 3

What are the 6 operational objectives?

Answer 3

• Costs
• Quality
• Speed of response
• Flexibility
• Environmental objectives
• Added value

Question 4

What is the operations decision making process?

Answer 4

1. Analyse operations data
2. Make operational decisions
3. Implement decisions
4. Review
5. Set operations objectives

Question 5

What is benchmarking?

Answer 5

The aim of a business to achieve equal efficiency to the best in the industry.

Question 6

What are some internal influences on operational objectives?

Answer 6

• Staff motivation
• Level of staff training

Question 7

What are some external influences on operational objectives?

Answer 7

• ## Competition (if other brands have high productivity)

Question 8

What is a quality good?

Answer 8

A good which meets a customers requirements.

Question 9

What are costs?

Answer 9

The amounts incurred by a business as a result of its trading operations

Question 10

What is the speed of response?

Answer 10

The elapsed time between customers requesting products or services and their receipt of them.

Question 11

What is flexibility?

Answer 11

How responsiveness the business can be to short-term or unexpected changes in demand.

Question 12

What do environmental objectives focus on?

Answer 12

Ensuring that business decisions take environmental responsibility seriously.

Question 13

What is added value?

Answer 13

The process of increasing the worth of a product/resources by modifying them.

Question 14

Why is operational management important to a business?

Answer 14

• improves the productivity of employees
• helps in improving the goodwill of the organisation
• profits rely on lean, efficient operations
• poor operations can threaten a business’s survival.