Operational Strategies

Question 1

External influences on operational objectives

Answer 1

Economic environment, competition flexibility, technological change, legal and environmental change

Question 2

Types of operational objectives

Answer 2

Cost and volume, quality, efficiency and flexibility and environmental

Question 3

Economies of scale

Answer 3

Arise when units costs fall and output increases.

Question 4

Internal economies of scale

Answer 4

Arise from the growth of the business,
Technical- investing in specialist capital machinery
Specialisation- splitting complex production processes into smaller ones so work force can reduce more in the same time

Question 5

Diseconomies of scale

Answer 5

When a business expands in the long run the unit cost of production increases

Question 6

Factors influencing diseconomies of scale

Answer 6

Coordination- coordinate complicated production processes when the business is spread over separate plants, flow of information can be expensive
Can be improved by bettering hr strategies

Question 7

Labour intensive

Answer 7

Labour costs higher than capital costs, costs are mainly variable with a lower Breakeven output I.e. Food processing

Question 8

Capital intensive

Answer 8

Capital costs higher than labour costs, mani lay fixed with higher Breakeven output I.e. Car manufacturing

Question 9

Innovation

Answer 9

Putting a new idea or approach into action

Question 10

Implications of innovation

Answer 10

Challenge the norms of the market, have a deep understanding of customer needs, develop imaginative solutions to design problems, competitors are likely to copy and react, ability of finance, uncertain profits

Question 11

Methods of making location decisions

Answer 11

Are cost and supply issues much more important that customers and revenue
Can qualitative methods be used to evaluate alternative location options
Do qualitative factors including management preference outweigh the financial considerations

Question 12

Benefits of the right location

Answer 12

Competitive unit costs, optimal revenues, rate of return, suffice client production capacity to meet demand, access to labour

Question 13

Advantages and disadvantages of multi site location

Answer 13

Closer to customers, greater potential for promotion, recruitment may be easier, less risk of disruption
Diseconomies of location, harder to control and communicate, duplication of activities

Question 14

Issues involving international location

Answer 14

Currency fluctuations, exchange rates, language barriers, tariffs, political instability, ethical approaches

Question 15

Internal influences on operational objectives

Answer 15

Corporate objectives, finance, hr, marketing issues