Operational Objectives Flashcards
What are operational objectives?
Targets set for production
What can setting operational objectives help a company?
Achieve its overall objectives
What 3 things can the performance of the production department can be reviewed by?
Quality
Costs
Efficiency
What does the quality objective involve?
Maintaining or improving levels of quality
What does the costs objective involve?
To minimise costs especially if they are price competitive
What does the flexibility objective involve?
Businesses need to be able to react to what customers want
What does the efficiency objective involve?
To make better use of resources in order to reduce costs and increase profit
What does the innovation objective involve?
Businesses can set their R&D department innovation targets
What does the environment objective involve?
Pressure from customers and the Government often leads to firms setting objectives
What does the speed of response objective involve?
The speed at which a business can operate is important
What is the dependability objective involve?
Customers need to be able to depend on a business and businesses need to depend on their suppliers.
What is added value?
A key operational objective for any business
What is added value?
Increasing the difference between the cost of the raw materials and the price the customer pays
How do you calculate added value?
Sales revenue minus cost of bought-in goods and services
How can added value achieved by?
Increasing the selling price or by reducing the costs of raw materials
What are operational objectives influenced by?
Internal and external factors
What is 3 internal factors that influence operational objectives?
Nature of the product
Availability of resources
Other departments
How does the nature of the product influence operational objectives?
Different targets
How does availability of resources influence operational objectives??
Many businesses would like to increase output but are limited due to resources
How do other departments influence operational objectives?
Objectives and decisions made in the finance,marketing and HR department will affect production.
What are 3 external factors that influence operational objectives?
Market conditions
New technology
Competitors performance
How do market conditions influence operational objectives?
if customers are spending less money or there are more competitors
How does new technology influence operational objectives?
The process needs to adapt
How does competitors performance influence operational objectives?
Many firms set targets in reaction to their rivals actions
