Operations

Question 0

What is value adding

Answer 0

creation of extra or added value as inputs are transformed into outputs

Question 1

What is the transformation process

Answer 1

conversion of INPUTS into OUTPUTS

Question 2

what is operations interdependence with other key business functions?

Answer 2

Operations employs human resources in the making of the product used by marketing which is funded by finance

Question 3

What are inputs?

Answer 3

inputs include raw materials, land, labour, resources, machinery, technology, ideas, information which all lead to outputs

Question 4

Outline the strategic role of operations management

Answer 4

Involves contributing to the strategic direction of the business. Main business goal is to maximise profits. Operations can contribute to this by providing products/services in the most COST EFFICIENT manner. By reducing costs and maximising sales… profits INCREASE

Question 5

what costs are involved in operations?

Answer 5

• Input costs
• Labour costs
• Processing costs (machinery, electricity, water etc)
• Inventory costs
• Quality management costs

Question 6

Describe COST LEADERSHIP

Answer 6

Involves striving to have LOWEST costs so that you can have the most COMPETITIVE PRICES in the market.
This is achieved through economies of scale

Question 7

What is the basis of goods & services differentiation

Answer 7

Strategy where businesses seek to be competitive on the basis of its goods and services being DIFFERENT or BETTER than competitors

Question 8

What are goods/services differentiated by?

Answer 8

• tangibility and perishability
• customisation
• ownership
• time between production and consumption
• determination of value

Question 9

How can a business differentiate its PRODUCT?

Answer 9

• product features
• quality
• augmented features (added on benefits)

Question 10

how can a business differentiate its SERVICES?

Answer 10

• Time spent performing service
• level of expertise/experience by service provider
• quality of materials used

Question 11

What are standardised goods?

Answer 11

Mass produced, same level of quality

Example: COCA-COLA

Question 12

What are customised goods?

Answer 12

adjusted to suit needs of customers, definitely applies to service
Example: subway offering a variety of topics

Question 13

What are the influences of operations management?

Answer 13

Acronym: 2GLTEQC

• Government policies - Environmental sustainability
• Globalisation - Quality expectations
• Technology - Cost-based competition
• Legal regulation

Question 14

What is meant by corporate social responsibility?

Answer 14

CSR refers to open and accountable business actions based on respect for people, community/society and environment.
Involves business doing MORE than just laws and regulations..

Question 15

What does CSR value?

Answer 15

Corporate social responsibility values the triple bottom line:

                             1. Financial returns
                             2. Social responsibility
                             3. The environment

Question 16

Explain:

‘Legal compliance’ vs ‘Ethical responsibility’

Answer 16

Legal compliance requires business to follow letters of the law whereas ethical responsibility sees a business goes above and beyond the laws requirements.
-> As complying with the law is expensive, ethical responsibility (taking law further) shows that a business is not concerned with just profits

Question 17

What are the two types of outsourcing?

Answer 17

Onshore: Using domestic businesses as outsourcing provider. Usually contractors
Offshore: Taking activities to a provider overseas. Takes advantages of regulatory differences

Question 18

What is the role of the ILO

Answer 18

The International Labour Organisation is an international body which provides a set of guidelines/rules for labour internationally.
Businesses can refer to the ILO for assistance with ethical decision making in offshore outsourcing and international labour restrictions

Question 19

What is meant by Environmental sustainability in operations management?

Answer 19

Eco growth should not occur at the expense of the environment. Environmental sustainability is about having a balance between economic concerns and environmental concerns
There is a current expectations that products are ‘clean, green and safe’

Question 20

What is meant by Social responsibility in operations management?

Answer 20

Socially responsible businesses aim to:

          1. Expand business
          2. Provide for greater good of society

Social responsibility is good for building reputation and therefore sales