Operational Objectives Flashcards
1
Q
What is operations management?
A
The management of processes, activities, and decisions relating to the way goods and services are produced and delivered.
2
Q
What are the key tasks of operations management?
A
- add value
- ensure quality
- coordinate supply chain
- operate efficiently
- manage resources
3
Q
What are the key types of operational objectives?
A
- cost and volume
- quality
- efficiency and flexibility
- environmental
4
Q
What are cost and volume objectives?
A
- effective costs.
- cost effectiveness = total costs/total units
- similar cost structures but different variables (production, efficiency, and scale).
- low unit cost allows companies to compete.
5
Q
What are examples of cost and volume objectives?
A
- productivity and efficiency (eg units per week or employee).
- unit costs per item.
- contribution per item.
- number of items to produce (per time period, or per machine, etc).
6
Q
Why is quality more important now?
A
- markets are more competitive.
- customers are more knowledgeable, demanding, prepared to complain about poor quality, able to share information.
- can create advantages.
7
Q
What are the different types of quality objectives?
A
- scrap/defect rates: a measure of poor quality.
- reliability: how often something goes wrong, average lifetime use, etc.
- customer satisfaction: measured by customer research.
- number/incidence of customer complaints.
- customer loyalty - eg percentage of repeat business.
- percentage of on time delivery.
8
Q
What are efficiency and flexibility objectives?
A
- closely linked to cost targets.
- looks at how effectively business assets are being utilised.
- how responsive a business can be to changes in demand.
- efficiency and flexibility are key determinants of unit costs.
9
Q
Examples of efficiency and flexibility objectives.
A
- labour productivity
- output per time period
- capacity utilisation
- order lead times
10
Q
What are environmental objectives?
A
- stringent environmental legislation.
- buying decisions on firms that take environmental responsibility seriously.
- an increasingly important focus of operational objectives.
11
Q
Examples of environmental objectives.
A
- use of energy efficiently.
- proportion of production or packaging materials that are recycled.
- compliance with waste disposal regulations/proportion of waste to landfill.
- supplies of raw materials from sustainable sources.
