4 - Operational Objectives

Question 1

What Are The Operational Objectives?
(5 Points)

Answer 1

~ Reduce unit costs.

~ Increase quality.

~ Response speed + flexibility.

~ Environmental objectives.

~ Create added value.

Question 2

Describe ‘Reduce Unit Costs’ As An Operational Objective
(3 Points)

Answer 2

~ Could lead to higher profit margins, assuming you keep prices the same.

~ To reduce price -> keep unit costs low -> enabling continued competitiveness.

~ To reduce total costs -> decrease fixed or variable costs.

Question 3

Describe ‘Increase Quality’ As An Operational Objective
(2 Points)

Answer 3

~ Products with better quality -> higher customer satisfaction -> in the LT reputation for product improving.

~ Better quality -> increased competitiveness.

Question 4

Describe ‘Response Speed + Flexibility’ As An Operational Objective
(2 Points)

Answer 4

~ How quickly you are fulfilling customer orders and queries.

~ Speed of adaptability of changing to customer needs.

Question 5

Describe ‘Environmental Objectives’ As An Operational Objective

Answer 5

Does the business have considerations for the communities they operate within.

Question 6

Describe ‘Create Added Value’ As An Operational Objective
(2 Points)

Answer 6

~ Ensuring that the value of output is higher than the sum of the value of all the inputs.

~ Increasing the distance between price and unit cost.

Question 7

What Are The Internal Influences On Operational Objectives?
(4 Points)

Answer 7

~ Finance available.

~ Skills of the workforce.

~ Effective marketing.

~ Availability of capital.

Question 8

What Are The External Influences On Operational Objectives?
(5 Points)

Answer 8

~ Benchmarking.

~ Environmental targets.

~ Innovation, to differentiate from competition.

~ PED + YED.

~ Ethics.

Question 9

What Is Adding Value?
(4 Points)

Answer 9

~ The extra value a business creates through its production, distribution or marketing process.

~ Production -> Improve product design, features or USP.

~ Distribution -> Offer product or service in a more convenient location.

~ Marketing -> Create brand image.

Question 10

What Are The Benefits Of Adding Value?
(4 Points)

Answer 10

~ Products or services stands out from rivals

~ Ability to charge higher prices.

~ Larger profit per unit.

~ Increase market share.