operations

Question 1

operations

Answer 1

refers to the business’s processes that involve transformation or more generally ‘production’. applies to both manufacturing and services sector

Question 2

manufacturing sector

Answer 2

processes involved in turning raw material and resources into outputs or finished goods/ products
eg. burger or chair

Question 3

service sector

Answer 3

process involved in carrying out a service eg. getting hair done

Question 4

overarching goal of business

Answer 4

to maximise profits, this is done by focusing on two important aspects of profit

• revenue or income
• cost or expenses

Question 5

the role of operations management

Answer 5

to design, implement and improve processes for turning resources into products. The main aims for the operations management are to make processes more efficient to reduce costs and improve quality to better satisfy customers.

Question 6

cost leadership

Answer 6

aiming to have the lowest costs or to be the most price competative in the market. Key aspect: although trading with the lowest costs, the overall business should still be profitable

Question 7

economies of scale

Answer 7

cost advantages that can be created because of an increase in scale of business operations. Cost savings come from being able to purchase lower cost per unit of inout and efficiency created from the improved use of technology and machinery

Question 8

product differentiation: goods

Answer 8

varying the actual product features: providing one basic product and then in other varieties of increasing complexities or options

Question 9

varying product quality

Answer 9

making a low quality model available that is affordable and then increase the quality in another product under a higher price

Question 10

varying any augmented features

Answer 10

varying add ons or additional benefits assosiated with particular goods i.e. additional features you can purchase with a car

Question 11

product differentiation: services

Answer 11

varying the amount of time spent on a service: time is a factor that differentiates

Question 12

varying the level of expertise bought to a service

Answer 12

higher skill can bring a more specialised service

Question 13

varying the qualifications and experience of the service provider

Answer 13

highly qualified and experienced service providers can affect the quality of the service provided

Question 14

varying the quality of materials/ technology used in service delivery

Answer 14

more advanced technology and materials can improve the quality of service (from information software to advanced medical technology)

Question 15

differentiation being created from cross branding or strategic alliance

Answer 15

this approach adds value to products by offering consumers added benefits from cross-branding arrangements (woolworths x caltex alliance)

Question 16

differentiation is a business stratergy where:

Answer 16

the business seeks to be competative on the basis of characteristics of its good or service that set it apart from its rivals

Question 17

distinguish between standardised goods and customised goods

Answer 17

standardised goods:
- mass produced
- uniform in quality 
- meet a predetermined level of quality 
Customised goods:
- varied to meet customers needs
- produced with a market focus rather than a production focus

Question 18

drip pricing

Answer 18

headline price that is advertised at the beginning of an online purchasing process and additional fees and charges which may be unavailable are then incrementally disclosed

Question 19

interdependence

Answer 19

the mutual dependence that the key business functions have on one another. this means that the various business functions work best when they work together

Question 20

how can service be both standardised and customised

Answer 20

the fast food industry is an industry that aims to standardise their services - the process of producing their goods is followed within set guidelines. Things such as medical services are generally customised meaning they get treated differently depending on their problems.

Question 21

how is cost leadership linked with standardising products

Answer 21

when a product is standardised, costs associated with the can be minimised. When a business offers a service, then it can bring a cost leadership to the service by standardising how that service is performed.

Question 22

four main business functions

Answer 22

operations
- manufacturing, provision of service, other value adding, may be domestic or global

marketing
- sales and advertising, product design, marketing stratergies

finance
- administration, financial management, financial planning, management and change

human resources
- industrial relations (IR), human resource management (HRM), personal management

key functions are interdependent which means they rely on each other

Question 23

operations and finance

Answer 23

the interdependence of operations and finance hinges on money. all activities rely on funds. Operations might decide that a new machine is needed or that the plant needs to be reorganised, all of which cost money.

Question 24

marketing and operations

Answer 24

is concerned with how goods are promoted and delivered to customers, this includes decisions about production design, pricing, image of product on market, promotion etc.

Question 25

human resources and operations

Answer 25

HR is hiring, training and otherwise managing of staff. HR is needed to perform tasks and operate machinery. The performance of human resource management effects the performance of operations, the right workers must be hired with the right skill and be well motivated. this will allow for more efficient and effective operations.

Question 26

globalisation

Answer 26

the process by which businesses or other organizations develop international influence or start operating on an international scale.

Question 27

globalisation has resulted in:

Answer 27

the removal of trade barriers which means that there is greater free flow of capital (facilities/ machinery), labour, financial resources and technology between nations.

Question 28

supply chain management

Answer 28

involves the management and flow of supplies throughout the inputs, transformations processes and outputs to best meet the needs of customers.

• managing
• making decisions (which suppliers and how many)

Question 29

5 stratergies to respond to globalisation

Answer 29

• supple chain management (logistics, e-commerce, global sourcing)
• global factors (global sourcing, economies of scales, scanning and learning, research and development)
• outsourcing (advantages and disadvantages)
• new product or service design and development
• overcoming resistance to change (financial costs, purchasing new equipment, redundancy payments, retraining, re organising plant layout, inertia)

Question 30

logistics as a key aspect to supply chain management

Answer 30

Logistics - refers to the physical distribution and transportation of products (management of the movement of inputs, resources, outputs and information through the supply chain and distribution of finished good to markets - goal is to achieve efficient, steady flow of materials through supply chain)

Question 31

E- commerce as a key aspect to supple chain management

Answer 31

the buying and selling of goods and services over the internet (businesses manage their supply chain through electronic ordering. E-procurement is the use of online systems to manage supply, allowing suppluers direct access to the business’s level of supplies. B2B (business to business) arrangement gives one business (supplier) access to another (buyer) allowing them to supply goods when needed)

Question 32

global sourcing as a key aspect to supple chain management

Answer 32

refers to the businesses purchasing production inputs from suppliers from all around all around the world, rather than local suppliers to take advantage of lower costs, expertise, and access to new technologies and quality resources EXTEND

Question 33

global sourcing (global factors)

Answer 33

operations strategy involving the sourcing of goods and services from across national boundaries.

benefits of global sourcing

• cost advantages
• access to new technologies
• labour specialisation
• expertise
• ability to operate over extended hours

challenges:

• possible relocation of aspects of operations
• managing different regulatory conditions between nations
• financial concerns from risk associated with exchange rate fluctuations
• misunderstandings due to poorly negotiaited service level agreements