Setting Operational Objectives

Question 1

Operations management

Answer 1

• Operations management involves managing the process of converting inputs into outputs. It transforms resources into goods and services.
• Goods are tangible items such as cars.
• Services are intangible such as mortgages.

Question 2

What decisions does operations management involve taking

Answer 2

• The level of output a business needs to be able to produce.
• The range of products the business wants to offer.
• How best to produce the good or service.
• How best to provide the good or service to the customer.
• How much of a processes managers want a business to provide itself.

Question 3

Stages of the operation process

Answer 3

• Raw materials.
• Manufacturing.
• Transportation.
• Retail.
• Disposal recycling.

Question 4

The nature of operations management can involve

Answer 4

• gathering, analysing and distributing information.
• storing and transporting products.
• transforming people.
• producing goods.
• bringing products and customers together.

Question 5

What does the operations decision making process involve

Answer 5

• identifying the operations objectives.
• analysing the existing position of the business in relation to operations.
• choosing what actions need to be taken to achieve the objectives.
• implementing these decisions.
• reviewing to see if they are on target and taking actions if not.

Question 6

What will ethical issues be involved in

Answer 6

• how to reward and treat employees.
• where to locate the business.
• safety features.
• the environment.

Question 7

Examples of operation objectives

Answer 7

• Quality- Operations managers have to decide what they think customers want and expect and then set appropriate targets.
• Speed of response- Businesses may compete by providing their goods or services faster than their competitors.
• Costs- If a businesses can produce at lower costs than rivals it can make profits with the same price or it may allow a business to reduce its price and be competitive on that basis.
• Flexibility- If a business can meet customer needs more precisely than others this may give it an advantage.
• Environmental objectives- Greater awareness of the environmental impact of operations decisions and greater interest in the impact of decisions by stakeholders has raised the profile of objectives.

Question 8

Internal influences on operational objectives and decisions

Answer 8

• Marketing activities may determine what actually has to be produced, how it is produced and what quantities are needed.
• Human Resources may determine what is possible.
• Finance- may affect the level of investment in technology which can affect what can be produced.

Question 9

External influences on operational objectives and decisions

Answer 9

• Political and legal factors.
• Economic factors- Changes in economic factors will affect the demand for products and the costs of producing them.
• Social factors- There is now greater demand from customers for choice and variety.
• Technological factors- With technological advances it becomes quicker to develop, test and launch new products.
• Competitors- There is greater demand for better customer service as customers realise their power to demand more and can find alternatives.