Role of Operations Management Flashcards
What does Operations refer to?
The process of transforming inputs into outputs, which is called PRODUCTION
What is the Strategic Role of Operations Management?
To assist the business in achieving its overall goal of profit maximisation,
this is done by cost leadership and good/service differentiation
What is Cost Leadership?
To have the lowest costs or be the most price competitive in the market.
What are advantages of Cost Leadership?
- Businesses can make a larger profit
- Businesses can drop their prices creating a competive advantage (more customers, more market share)
How can Cost Leadership be acheived?
- Investing in technology, research and development
- Lower production costs
- Use Economies of Scale
What is Good/Services Differentiation?
Distinguishing products from competitors based on factors other than price
How can Good/Services Differentiation be achieved?
- Good Differentiation
- Service Differentiation
- Cross-Branding
What factors are considered in Goods Differentiation?
- Standardised vs Customised
- Perishable and Non-Perishable
- Intermedite Goods
What factors are considered in Services Differentiation?
- Standardised vs Customised
- Self-service
What are Standardised goods?
Goods that are mass produced, usually on the same assembly line. They are uniform in quality and have a predetermined level of quality
What are Customised Goods?
Goods that are tailored and varied to meet the needs of individual customers.
What are Perishable Goods?
Goods that deteriote. They need to be kept as fresh as possible when they are delivered to customers.
What are Non-Perishable Goods?
More durable products so they last longer and do not spoil
What are Intermediate Goods?
Goods that go through the production line MULTIPLE times
How can you differ Goods?
Through:
* Features
* Quality
* Augumented Features
