3.4.1- Setting operational objectives

Question 1

What are the operational objectives?

Answer 1

• Quality
• Costs
• Flexibility
• Speed of response
• Dependability
• Environment
• Efficiency
• Innovation
• Added value

Question 2

What are the objectives of quality?

Answer 2

Involves either maintaining or improving quality. E.g. company may aim to reduce the number of customer complaints they get

Question 3

What are the objectives of costs?

Answer 3

Many firms aim to cut costs, especially if they compete on price, to attract more customers. E.g. The costs of a product may be reduced

Question 4

What are the objectives of flexibility?

Answer 4

Businesses need to be able to react to what customers want. E.g. If a business knows people buy fewer health ready-meals at Christmas may reduce production of product.

Question 5

What are the objectives of efficiency?

Answer 5

Aim to make better use of resources in order to reduce costs and increase profit. E.g. Increasing capital utilisation or improve labour and capital productivity.

Question 6

What are the objectives of innovation?

Answer 6

Businesses can set their research & development department innovation targets. This can be difficult to achieve. E.g. Car manufacturers setting an objective to produce an electric car that charges in 5 mins by 2026.

Question 7

What are the objectives of environment?

Answer 7

Pressure from customers and the gov leads to firms setting environmental objectives. E.g. Cutting down carbon emissions

Question 8

What are the objectives of speed of response?

Answer 8

The speed a business operates is important. E.g. decreasing production time, decreasing customer waiting time.

Question 9

What are the objectives of dependability?

Answer 9

Customers need to be able to depend on a business and businesses need to be able to depend on their suppliers. E.g. If its more likely in stock, customers are likely to buy it even if its more expensive.

Question 10

What are the objectives of added value?

Answer 10

• This is increasing the difference between the costs of raw materials and the price to pray. This helps increase profits.
• Can be done by increasing selling price, reducing costs of raw materials, being environmentally friendly, or quick speed or response.