Operations - Role of operations

Question 1

Define operations

Answer 1

Operations refer to the business processes that are engaged in transformation or more generally, ‘production’

Question 2

Define inputs

Answer 2

resources used in the transformation process

Question 3

Define outputs

Answer 3

the end of the businesses efforts - the good or service that is provided or delivered

Question 4

What is the transformation process?

Answer 4

inputs -> transformation/ value adding -> outputs

Question 5

What is the strategic role of operations?

Answer 5

strategic meaning affecting all business functions

PROFIT MAXIMISATION
- maximising revenue/ income
- minimising costs/ expenses

Question 6

Define profit centres

Answer 6

aspects of the business that directly derive income and revenue
eg. an individual shop or retail chain or a sales person

Question 7

Define cost centres

Answer 7

aspects of the business that do NOT directly derive income but do incur costs
eg. operations functions

Question 8

Define cost leadership

Answer 8

refers to when a business tries to gain a competitive edge by having the lowest operations costs or to be the most price competitive in the market

Question 9

Define economies of scale

Answer 9

refers to cost advantages that can be created as a result of upscaled business operations
eg. reducing price per unit by buying stocks in bulk or using machinery/tech to increase efficiency

Question 10

What are ways to differentiate products?

Answer 10

• varying actual product features
• varying product quality
• varying any augmented features –> refers to add ons or additional benefits associated with particular goods

Question 11

What are ways to differentiate services?

Answer 11

• varying the amount of time spent on a service
• the expertise of the person who carries out the service
• varying the quality of the goods/ materials used to carry out the service

Question 12

define cross branding

Answer 12

• Occurs when alliances between companies are made
• This gives customers added benefits by interacting with particular products
• In this case, differentiation occurs not from the product itself but from an external factor
  Eg. coles and shell, woolworths and caltex, red bull and go pro

Question 13

Whats the difference between standardised g&s and customised g&s?

Answer 13

standardised goods
- mass produced - produced with a production focus
- eg. milk, bread, minerals
customised goods
- varied depending on customer needs - produced with a market focus

standardised services
- eg. medical advice from gps, fast food, advice from solicitors when purchasing a property
customised services
- eg. law services, accounting services

Question 14

Whats the difference between perishable and non perishable goods?

Answer 14

perishable goods
process needs to integrate
- high standards of quality, safety and cleanliness
- short lead times and efficient distribution
- appropriate and robust packaging and cold storage processes

nonperishable goods
- more durable –> issues pf quality and inventory management

Question 15

What are intermediate goods?

Answer 15

goods that are processed more than once - once goods have been completed they may be used as inputs once again in further processing
eg. manufacturer converts steel into screws - the screws may then be used in the manufacturing of electronics/ devices as an input

Question 16

How is operations interdependent on the other KBF?

Answer 16

• discuss financial needs with finance
• discuss staffing and t&d needs with hr - hr provides suitable staff based on the needs of operations
• discuss product design with marketing - mkt must undertand the capabilities/ limitations of operations

Question 17

How does Qantas differentiate its products and services?

Answer 17

• offers the most comprehensive and international coverage (flights every 30 mins in peak periods)
• jetstar aimed at price conscious customers whereas qantas is a full service airline
  qantas includes comfort based features eg. skybeds, special menus, lounges, online check in and self service kiosks

Question 18

Interdependence of KBF in relation to Qantas

Answer 18

Human resources:
- Recruitment, training and developing (boeing 787 pilots and crew to be fully trained and effectively integrated) retaining staff (motivation benefits and negotiated monetary rewards)
- Operations communicate their human resource needs to HR department

Finance:
- Monitors, records and analyses financial transactions
- Provides regular and periodic reports on financial performance to support operational management and decision making
- Operational activities like purchasing and leasing new planes rely on available funds

Marketing:
- Connecting operations with customers by proving market requirements
- Operations influence marketing decision by determining capabilities and constraints in pricing, product design and promotion