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Business Studies > Operations > Flashcards

Operations Flashcards

1
Q

What is the value of setting operational objectives

A

Help an organisation achieve their long term goals - also might help improve budgeting

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2
Q

What are the seven main operational objectives

A 
Costs 
Quality 
Speed of response 
Flexibility 
Dependability 
Environmental objectives 
Added value
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3
Q

What does a business set costs as an operational objective

A

Lower costs is more competitive
Higher profit margin
They would be able to lower price compared to competitors which might lead to increased sales

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4
Q

Why do businesses set quality as an operational objective

A

Because a business wants to maintain quality because bad quality items may not be able to be sold and it would also give a bad reputation to the business if there products are of bad quality

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5
Q

Why does a business set an operational objective as the speed of response

A

A faster speed of response benefits consumers and may be competitive
If the business has a fast speed of response that means they are being efficient and have high labour productivity which also decreases costs

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6
Q

Why does a business set flexibility as an operational objective

A

Able to extend operating hours
More job satisfaction
Consumer satisfaction and loyalty
Improved competitiveness

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7
Q

Why does a business set dependability as an operational objective

A

Consumers can trust the business and brand loyalty with customers might develop

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8
Q

What does dependability mean

A

That consumers can rely on your organisation to receive their goods and or services as when promised

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9
Q

Why does a business set environmental objective as an operational objective for an organisation

A

Because the business always wants to aim to be eco friendly if the business as the correct culture and morals

It may also increase the attractiveness of the products to some consumers

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10
Q

Why does a business set added value as an operational objective

A

An high quality product with added value is desirable for people to have meaning that more people want to buy the product

If the business can add value to the product then they can become more competitive if they keep the price down

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11
Q

What are the internal influences on operational objectives

A

Corporate objectives
Finance
Human Resources
Marketing issues

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12
Q

Why is corporate objectives an internal influence on operational objectives

A

As with all the functional areas corporate objectives are the most important internal influence. An operational objective (e.g. higher productivity capacity) should not conflict with a corporate objective (e.g. lowest unit costs)

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13
Q

Why is finance an internal influence on operational objectives

A

Operational decisions often involve significant investment and cost the financial position of the business (profitability, cash flow, liquidity) directly affect the choices available

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14
Q

Why is Human Resources an internal influence on operational objectives

A

For services business in particular, the quality and capacity of the workforce is key factor in affecting operational objectives. Targets of productivity, for example,will be affected by the investment in training and the effectiveness of workforce planning

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15
Q

Why is marketing issues and internal influence on operational objectives

A

The nature of the product determines the operational set-up. Regular changes to the marketing mix - particularly product - may place strains on operations, particularly if the product is relatively inflexible

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16
Q

What are the external influences on operational objectives

A

Economic enviroment
Competitor efficiency flexibility
Technological change
Legal and environmental change

17
Q

Why is the economic environment an external influence on operational objectives

A

Crucial for operations. Sudden or short term changes in demand impact on capacity utilisation, productivity etc. Changes in interest rates impact on the cost of financing capital investment in operations

18
Q

Why is competitor efficiency flexibility an external influence on operational objectives

A

Quicker, more efficient or better quality competitors will place pressure on operations to deliver at least comparable performance

19
Q

Why is technological change a external influence on operational objectives

A

Also very significant - especially in markets where orifice life cycles are short, innovation is rife and production processes are costly

20
Q

Why is legal and environmental change an external influence on operational objectives

A

Greater regulation and legislation of the environment places new challenges for operational objectives

21
Q

What is labour productivity

A

How much an employee produces

22
Q

What is the formula for labour productivity

A

Output per period / number of employees in that period

23
Q

If a takeaway produces 3,000 meals in one week and 7 full time staff what is the labour productivity

A

3000 / 7 = 428.6

24
Q

Why are unit cost calculations useful for the operations department

A

Unit cost figures can be used to compare the production cost per unit against other departments, competitors or between years

25
Q

How do you calculate unit costs

A

Total costs / units produced

26
Q

Why is capacity utilisation useful to a business

A

A business can work out what % is its maximum output is being used

27
Q

How do you calculate capacity utilisation

A

Total output / total capacity x100

28
Q

A restaurant produces 150 meals a day. The total cost of this is £500. What is the unit cost?

A

£3.33

29
Q

Which type of calculation is useful for understanding a business maximum output level

A

Capacity

30
Q

What is a problem with operations data

A

May only apply to business that produce physical products

31
Q

What is the term to describe the cost per increment of output

A

Unit cost

32
Q

What has made operational data less straightforward to deal with

A

The internet

33
Q

What the importance of capacity

A

A business must understand its capacity to make sure that it does not commit to more orders than it can fulfil with a certain time period

34
Q

What is the importance of productivity

A

Increasing the number of or productivity levels of staff and investing in technology can help a business to increase its total capacity.

35
Q

What is the disadvantage of 100% capacity

A

The business cannot respond to additional or special orders made at short notice

36
Q

What is outsourcing

A

Producing outside the country at lower costs

37
Q

What is advantage if outsourcing

A

Allows a business to increase its total capacity which may allow the business to meet increasing demand

38
Q

What is a disadvantage of outsourcing

A

Can lead to quality issues if outsources do not take quality as seriously as the business

39
Q

What are 4 ways to increase production capacity

A

Increasing staff productivity levels

Investing in technology

Outsourcing

Increasing the number of staff

Business Studies (4 decks)

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