4.1 Setting operational objectives

Question 1

What are the different operational objectives

Answer 1

• Cost objective
• Quality objective
• Dependability objective
• Environmental objectives
• Adding value

Question 2

Cost objectives

Answer 2

Reducing or maintaining costs e.g fixed and variable costs

Question 3

Quality objective

Answer 3

Improving or maintaining quality

Question 4

Dependability objective

Answer 4

If a business is dependable, customers trust the business as they value reliability and this allows the business to attract customers and increase its selling prices

Question 5

Environmental objective

Answer 5

Focussed on the environment

Question 6

Adding value

Answer 6

Occurs when businesses convert raw materials into a finished product and in doing so create a product which can be sold at a greater price than the cost of the individual components or materials used to make the product

Question 7

External and Internal on operation objectives and decisions

Answer 7

• The influence of other business functions
• How products influence objectives
• Availability of internal resources
• Technological advancements
• Changing tastes
• Globalisation

Question 8

Why does the influence of other business functions influence the operational objectives and decisions

Answer 8

For example: if operational objectives are focussed on flexibility and require the recruitment of additional temp staff for the festive period, the HR department will need to support this through their responsibility for overseeing recruitment

Question 9

Why does how products influence objectives influence the operational objectives and decisions

Answer 9

For example: if the product or service produced is sold competitively on the basis of price, objectives to reduce costs may be appropriate

Question 10

Why does the availability of internal resources influence the operational objectives and decisions

Answer 10

e.g labour and capital
For example: if there is a shortage of employees, it would be difficult to increase the speed of response and the business’ ability to increase its production levels

Question 11

Why does technological advancements influence the operational objectives and decisions

Answer 11

For example: developments in AI may allow businesses to improve their production processes

Question 12

Why does changing tastes influence the operational objectives and decisions

Answer 12

For example: when customers demanded healthier meals, McDonalds introduced a range of healthier menu alternatives

Question 13

Why does globalisation influence the operational objectives and decisions

Answer 13

For example: Customers’ ability to purchase products directly from China places pressure on UK manufacturers to remain competitive