U3 AOS3

Question 1

define operations management

Answer 1

all the activities in which managers engage to produce goods or services

Question 2

define effectiveness

Answer 2

the degree to which a business has accomplished its stated objectives

Question 3

define efficiency

Answer 3

how well a business uses resources in achieving its stated objectives

Question 4

explain the relationship between operations and business objectives

Answer 4

the core objective of all businesses is to maximise profit
other objectives that can be achieved: increasing market share, fulfilling a social need and providing a reasonable return for investors

• requires businesses to efficiently use resources to produce goods or services at the lowest possible cost
• operations management (owner, manager or department) is responsible for achieving these objective
• develop and focus on strategies such as materials management, quality, waste and use of technology
• need to ensure that the strategies being used within operations align with the objectives and strategies of the business
• efficient and effective operations should lead to satisfied customers, sales and the achievement of business objectives

Question 5

define inputs

Answer 5

the resources used in the process of production

Question 6

categories of inputs

Answer 6

natural resources and materials
- raw materials, components and parts consumed or converted by the transformation process

physical resources
- plant, machinery, equipment and property to conduct operations

human resources
- people involved in the operations function

financial resources
- funds/money required to commence and continue operations

info from a variety of sources
- cannot be easily quantified as an asset

time
- coordinating resources within appropriate time frames limits cost and wastage

Question 7

explain the differences between inputs of manufacturing and service businesses

Answer 7

manufacturing business
- make more use of capital equipment and materials
- use less human resources and information
- requires significant physical resources, such as equipment and buildings, in which to complete its processes

e.g. yakult
- milk, water, sugar etc are materials
- equipment and buildings are physical resources

service business
- make more use of human resources and information

e.g. a bank
- bank tellers and financial advisers are human resources
- buildings (bank branches) and computers where information is stored and retrieved

Question 8

explain the differences between inputs of manufacturing and service businesses (c and d)

Answer 8

c manufacturing business
more capital equipment and materials, less human resources and information

• materials, parts and components to assemble the car such as steel, rubber, plastic and aluminium
• capital equipment/physical resources such as hardware tools for assembly, design, polishing etc to complete its processes, conveyor belts and warehouses

d service business
more human resources and information, less capital equipment and materials

• the doctor itself is a human resource
• information through medical forms, and documents about medication, records about the patient themselves etc, which can be stored and retrieved in computers

Question 9

define processes

Answer 9

the conversion of inputs (resources) into outputs (goods or services)

Question 10

explain the differences between processes of manufacturing and service businesses

Answer 10

manufacturing business
- conversion of inputs into a tangible product (goods that can be touched)
- takes materials and transforms these materials into outputs through processes

e.g. use of machinery, robots and computers to transform inputs into outputs
or
mixing ingredients
or
design, manufacturing and assembly processes

service business
- conversion of inputs into an intangible product (services that cannot be touched)
- rely heavily on interaction with the customer and processes are labour intensive

e.g.
banks give financial advice, a bank account or home loan for the customer
or
students, teachers etc produce school leaves who have knowledge and skills for further education and employment

Question 11

explain the differences between processes of manufacturing and service businesses (c and d)

Answer 11

c manufacturing business
conversion of inputs into a tangible product (goods that can be touched)

heating, cooling and shaping tools used to transform:
- plastic into windows or frames
- aluminium into engines
- steel into plates for doors and roof
- wires etc into electronic parts
robotics which use these newly made materials to design, assemble, test and distribute cars

d service business
conversion of inputs into an intangible product (services that cannot be touched)

• ensuring computer systems which stores and retrieve information works, so the doctor can access relevant information/documents/records to give medical advice or treatment (casts or medication) required
• ensuring medical equipment and procedures work, so the doctor can perform checkups or diagnose patients in need and come out with an understanding of their health/feel better
• ensuring good customer service, so patient feels comfortable and will come back, and is treated properly

Question 12

define outputs

Answer 12

the end result of a business’s efforts - the service or product that is delivered or provided to the consumer

Question 13

explain the differences between outputs of manufacturing and service businesses

Answer 13

manufacturing business
- transform inputs into tangible products, or goods
outputs/products basically all the same or similar

service business
- transform inputs into services
services tend to be differentiated as they are provided to individual customers and are modified to suit each customer

Question 14

explain the differences between outputs of manufacturing and service businesses

Answer 14

c manufacturing business
- cars

d service business
- diagnose patient of specific condition/disease to have better understanding of health
- provide specific treatment/medication for the patient depending on their condition/disease to get better

Question 15

explain the relationship between the operations system of manufacturing and service businesses

Answer 15

all businesses carry out many activities that can be isolated from direct involvement with the customer

the operations manager must be able to link transformation processes to the activities performed by other areas of the business
- output must always be responsive to customer demands
- issues of quality, efficiency and flexibility must be balanced against the resources and strategic plan of the business

Question 16

differences between the characteristics of operations management within manufacturing and service businesses

Answer 16

manufacturing
- produce goods that are tangible (can be touched)
service
- produce goods that are intangible (cannot be touched)

manufacturing
- goods can be stored for later use
service
- services cannot be stored

manufacturing
- little customer involvement in production (the consumer is typically not present when the good is produced)
service ‘
- customer is involved in production (the consumer typically has to be present when the service is produced)

manufacturing
- goods tend to be the same or similar
service
- services tend to be differentiated or tailored to individual customers

Question 17

differences between the characteristics of operations management within manufacturing and service businesses (c and d)

Answer 17

car manufacturing produces goods that is tangible (can be touched), whereas doctor practice produces good that is intangible (service that cannot be touched)
- tangible car
- intangible services such as checkup, diagnosis and provide meds

cars can be stored for later use, whereas for doctors practice, its services cannot be stored for later use as the service occurs on the spot

manufacturing of cars involves little customer involvement/interaction, whereas doctors practice involves the patient, as the patient typically has to be present when the service is produced

the manufacturing of cars tends to be the same or similar processes and outputs, whereas for doctors practice, its services differentiate and are tailored to individual patients

Question 18

define online services

Answer 18

the web pages, apps and platforms that allow a business to sell its products or provide their service to customers through the internet

Question 19

explain how online services help businesses achieve effectiveness

Answer 19

online services increase accessibility
- a website means that a business is accessible for sales 24 hours a day, 7 days a week (access anytime, anywhere), rather than customers wait for/only have access during in store hours or going to the store
- convenient for customers as they are able to directly obtain any/all information (policies, FAQ section, bookings etc) they need about the business easily online, rather than having to go in store
- increases customer satisfaction
- global reach/reduced geographical barriers (increases sales)

online services help with materials and production planning
- the business is able to receive feedback from customers, measure interest in the business and make improvements to all aspects of the good or service - quality, packaging, warranty, return policy etc
- apps allow businesses to use data from it and determine interest in a product and plan production schedules

Question 20

explain how online services help businesses achieve efficiency

Answer 20

online services can use fewer resources to communicate with customers
- online services can provide all information about the business and its promotions/special deals to customers directly/on the one site for instance, instead of having to physically provide this information through promoters, pamphlets, posters etc or word of mouth
- these processes are expensive, which means that it can take time to develop etc before it can even be used
- can be used to deliver consistent messages to customers and suppliers, and can also be used to gain customer feedback

online services reduce operating costs for businesses
- its website provides information on that platform, which reduces costs as the business does not have to take measures to determine customer interest etc
- reduce staffing needs and the overhead costs associated with in store needs - money needed to maintain in store, not much money needed to maintain online
- reduces the costs of labour and of leasing or purchasing physical space
- compared to online, in store is more expensive to maintain, while online is at a lower cost to maintain
- overhead costs are prevented, so time can be used more efficiently for other things

Question 21

advantages of online services

Answer 21

• can be used to deliver consistent messages to customers and suppliers, and can also be used to gain customer feedback
• a website means that a business is accessible for sales 24 hours a day, 7 days a week
• reduces the costs of labour and of leasing or purchasing physical space

Question 22

explain the relationship between master production schedule (MPS) and materials requirement planning (MRP)

Answer 22

MPS is a plan that details what is to be produced, in what quantities, how and when
- linked to specific delivery dates or contracts for delivery in the future

MRP involves developing an itemised list of all materials involved in production to meet the specified orders

the relationship between both is that
- Masters Production Schedule (MPS) is considered to be the input of Materials Requirement Planning (MRP)

• Materials Requirement Planning (MRP) is completed after Masters Production Schedule (MPS), as MPS provides the business with a clear understanding of the quantities to be produced and the time frame involved, so MRP is able to produce an itemised list of all materials involved in production to meet the specified orders

both have the aim of consistency between amount of materials and levels of production

Question 23

list the process of managing materials

Answer 23

1. forecasting
2. masters production schedule (MPS)
3. materials requirement planning (MRP)
4. inventory control
5. just in time