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Yr12 Business Studies > Role of Operations Management > Flashcards

Role of Operations Management Flashcards

1
Q

What does strategic mean in relations to business operations

A

Affecting all key business operations’

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2
Q

How is maximised profits achieved

A

Focusing on revenue maximisation and cost minimisation

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3
Q

What is the main business goal

A

Maximise profits

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4
Q

What are the two aspects of operations management

A
  • Cost leadership
  • Good/service differentiation
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5
Q

What are the different costs in business

A
  • Input costs
  • Labour costs
  • Processing
  • costs of getting products to markets
  • Costs associated with inventory management
  • Quality management costs
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6
Q

What are input costs

A
  • Facilities
  • Land
  • Energy
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7
Q

What are labour costs

A

Full-time and part-time employees

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8
Q

What are processing costs

A

Machinery, Electricity and scheduling

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9
Q

What’s an example of costs associated with inventory management

A
  • Logistics and distribution, damaged goods
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10
Q

What’s an example of quality management costs

A
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11
Q

What is cost-leaderhsip

A

Cost leadership is aiming to have the lowest costs and to be the most price-competitive in the market

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12
Q

What are strategies to reduce costs

A
  • Economies of scale
  • Control production costs
  • Control other costs
  • Technology
  • Standardisation
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13
Q

What’s an example of ‘other’ costs

A

R&D/marketing

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14
Q

What are examples of production costs

A
  • Labour
  • Raw material
  • Overheads (plant, equipment, power
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15
Q

What is economies of scale

A

Economies of scale are cost advantages reaped by companies when production becomes efficient

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16
Q

How is economies of scale achieved

A

Increasing production and lowering costs thus spreading costs over a larger number of goods

17
Q

What does economies of scale result in

A

Lower per unit costs

18
Q
A
19
Q

What does standardisation involve

A

The making of products that are homogeneous or identical.

20
Q

What other strategy to reduce costs does standarisation directly relate to

A

Economies of scale

21
Q

What does product differentiation mean

A

Distinguishing products in some way from those of competitors

22
Q

What might product differentiation for goods include

A
  • Varying the actual product features
  • Varying product quality
  • Varying augmented features
23
Q

What might product differentiation for services include

A
  • Varying the amount of time spent on a service
  • Varying the level of expertise brought to a service
  • Varying the qualifications and experience of the service provider
  • Varying the quality of materials/technology used in the service delivery
24
Q

What 2 features of goods will influence operations decisions

A
  • Standardised or customised
  • Perishable or non-perishable
25
Q

What are intermediate goods

A

Goods which are processed more than once

26
Q

What are 2 features of standardised goods

A
  • Mass produced
  • Uniform and meet a predetermined level of quality
27
Q

What are features of customised goods

A
  • Varied according to the needs of customers
  • Produced with a market focus rather than a production focus.
28
Q

What’s an example of a service which has been customised

A

Fast food industry

29
Q

How does operations relate to marketing

A
  • Marketing Identifies customers’ wants; create a marketing mix and assist operations through the design of new products, change existing products and after-sales service requirements
30
Q

How do operations and finance relate

A
  • Finance department must plan, organise, monitor and control financial resources
  • set financial controls for each part of operations; monitor progress
  • Pay staff and accounts
31
Q

How does operations relate to HR

A
  • Manages human effort at every stage of production, core and non-core activities
  • Identify staffing needs, training, organise staff during operations to meet objectives
32
Q

Case study for good/service differentiation

A
  • Apple differentiates product through its IOS operating system and unique features, 2014 Apple introduced Apple pay
  • However, 2012 Apple lost position as highest selling smart phone to Samsung due to a lack of innovation and increased competition
  • Apple also differentiates its product through quality, iPhones are marketed as a premium product
33
Q

Case study for cost leadership

A
  • Apple lowers production costs by forming partnerships with manufacturers such as Foxconn in China where labour and materials are much cheaper
  • Helps Apple achieve economies of scale
  • Introduced lower costs products such as iPhone 5c and iPhone SE
34
Q

Case study on goods/services in different industries

A
  • Apple’s iPhones are mass produced on a production line and are hence standardised and non-perishable
35
Q

Case study on standardised services

A
  • McDonald’s has standardised the service of fast-food through offering set menus and staff have specific role and use specific lines
  • Also implemented mass customisation through programs such as ‘create your taste’
36
Q

Case study for interpendnece of key business functions

A
  • Market research indicated the popularity of phablets in Asia led to the design and development of larger iPhones
  • When US President Trump began threatening to impose tariffs on Chinese imports, Apple’s profitability was threatened due to its dependence on Chinese outsourcing partners for operations à thus affecting Apple’s finance
  • HRM is in charge of hiring employees and thus affects operations
  • à2014 Foxconn hired additional 100,000 staff for production of iPhone 6 and 6s
37
Q

Outline the role of operations syllabus

A
  1. Stratgic role of operations (cost leadership, product differentiation)
  2. Goods and/or services in different industries
  3. Interdependence with ither key business functions

Yr12 Business Studies (17 decks)

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