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Business Studies A level > Decision making to improve financial performance- 4 > Flashcards

Decision making to improve financial performance- 4 Flashcards

1
Q

What are operational objectives?

A

Operational objectives are set to achieve a competitive advantage and must fit with the overall competitive strategy of the business

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2
Q

Quality objectives:

A

Managers decide what they think customers want and expect and then set appropriate targets

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3
Q

Speed of response objectives:

A

Providing goods and services faster than competitors

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4
Q

Dependability objectives:

A

Ability of the business to deliver reliably on time

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5
Q

Cost objectives:

A

Enables controlling of prices between competitors - setting lower or higher prices

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6
Q

Flexibility objectives:

A

Providing customer needs more precisely

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7
Q

Environmental objectives:

A

Greater awareness of environmental impact of operation decisions

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8
Q

Internal influences on operational decisions:

A
  • Marketing = what is produced, how and what quantities required
  • Human resources = what is possible - skills of staff
  • Finance = may affect what can be produced
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9
Q

External influences on operational decisions:

A
  • economic
  • technological
  • competitive
  • social
  • legal
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10
Q

Political and legal factors:

A

Place restrictions on what can be produced, how, where and who it can be produced for

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11
Q

Economic factors:

A

Allows businesses to source supplies from around the world, removal of taxes have enabled more global operations

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12
Q

Social factors:

A

More availability of choices allowing customers to easily search for alternatives

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13
Q

Technological factors:

A

Quickly develop, test and launch new products

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14
Q

Competition factors:

A

Customers switch to competitors because they demand more

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15
Q

What is labour productivity?

A

Measures output per employee and can be calculated using:
- total output / number of employees

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16
Q

What is unit costs?

A

Measures cost per unit and can be calculated using:
- total costs / total output

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17
Q

What is economies of scale?

A

It is a cost advantage where production becomes efficient and cost per-unit decreases as quantity produced increases

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18
Q

What is diseconomies of scale?

A

Average unit costs begin to increase because of business growth

19
Q

What is capacity?

A

Capacity measures the maximum it can produce with it’s given resources. Capacity can be increased by increasing resources although this could take time

20
Q

What is capacity utilisation?

A

It measures the existing output as a percentage of the maximum possible output
- existing output / maximum possible output x100
- the higher the capacity utilisation, resources are being fulfilled

21
Q

Why is efficiency important to a business?

A

Efficiency allows the business to drive unit costs down and either bring the price down or make higher profits with the same price

22
Q

If capacity utilisation is low a manager might:

A
  • improve marketing
  • reduce capacity
  • reduce demand
23
Q

How can we increase efficiency?

A

By increasing labour productivity (output per employee)

24
Q

How can we increase labour productivity?

A
  • new ways of working
  • better management
  • new reward systems
  • training
  • new technology
25
Q

What is lean production?

A

Lean production is when managers reduce waste to improve operations efficiency

26
Q

How do managers reduce waste in lean production?

A
  • Improving quality
  • Reducing amount of inventory held
  • Reducing time items are waiting for something to happen to them
  • Reducing the time it takes for items to move from one stage of process to another
27
Q

What is included in a quality process?

A
  • Plan
  • Do
  • Check
  • Act
28
Q

How can managers improve quality?

A
  • use market research
  • careful selection of suppliers
  • train employees
  • invest in technology
  • review the production process to see if any systems can be improved
29
Q

How to improve operational performances?

A
  • speed of response
  • dependability
  • becoming more flexible
30
Q

What is mass customisation?

A

Using technology to produce items on a large scale while adapting the individual items to meet individual customer needs

31
Q

What are the costs of holding inventory?

A
  • opportunity costs
  • cost of losing value
  • security costs
  • storage costs
32
Q

How can inventory control charts help the management of inventory?

A
  • buffer inventory = minimum inventory a business wants to hold
  • lead time = how long it takes from a placed order to items arriving
  • re-order level = level at which new order must be placed for suppliers
  • re-order quantities = amount manager orders of a specific item
33
Q

what influences the choice of suppliers?

A
  • cost of materials and quality
  • dependability
34
Q

what is outsourcing?

A

When a business uses another provider for some goods and services

35
Q

What are the benefits of outsourcing?

A
  • use of special skills and services
  • increase capacity of the business
36
Q

what are the disadvantages of outsourcing?

A
  • affected by other businesses cost and quality
  • business could be held accountable for the actions of the suppliers
  • pay enough for the products for the supplier to make profit
37
Q

How can you improve operational performances?

A
  • speed of response
  • dependability (starting and finishing at stated time)
  • becoming more flexible (made-to-order)
38
Q

What is the cost of holding inventory?

A
  • storage
  • security
  • opportunity
  • loosing value
39
Q

What does the inventory control chart include?

A
  • buffer inventory = minimum amount held
  • lead time = order placed -> item arriving
  • re-order level = new order for supplies
40
Q

What choices affect the decision of suppliers?

A
  • cost of materials
  • quality of materials
    -dependability (when supplies arrive)
  • ethical considerations
41
Q

What will an effective supply chain ensure?

A
  • supplies arrive on time
  • fair price is paid
  • products are produced in an acceptable way
42
Q

What decisions have to be made to manage a supply chain?

A
  • what to produce
  • supplier strategy = how many to work with
  • suppliers operations (employees, where they source their materials)
43
Q
A

Business Studies A level (10 decks)

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