U3 AOS3

Question 1

define operations management

Answer 1

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

• concerned with the strategies used to create, operate and control the tranformation of inputs from a variety of sources into outputs
• make use of strategies including management of materials, quality, waste and use of technology
• focuses on effectiveness and efficiency

Question 2

define effectiveness

Answer 2

measures how well a business is meeting its stated objectives, which in operations management generally means how well a business is meeting customers’ expectation in terms of quality, features and delivery

Question 3

define efficiency

Answer 3

how well a business is using its resources, which essentially measures how many outputs are produced with each unit of input to achieve its stated objectives

Question 4

explain the relationship between operations and business objectives

Answer 4

1. operations management is responsible for determining business objectives

• the core objective of all businesses is to maximise profit
• require businesses to efficiently use resources to produce goods or services at the lowest possible cost

2. focus on management of materials, quality, waste minimisation and technological development
3. needs to ensure that the strategies being used within operations align with the objectives and strategies of the entire business
4. effective and efficient operations should lead to satisfied customers, sales and subsequently, the achievement of business objectives

Question 5

state the key elements of an operations system

what is needed > how it is made > result

Answer 5

inputs
processes
outputs

Question 6

define inputs

Answer 6

the resources used in the process of production

six categories of inputs:

• natural resources and materials
• physical resources
• human resources
• financial resources
• information from a variety of sources
• time

Question 7

explain the differences between the inputs of manufacturing and service businesses

Answer 7

manufacturing:

• tend to make more use of capital equipment and materials
• use less human resources and information

e.g. yakult uses natural resources of milk, water, sugar and a specific bacteria strain to make its product, as well as physical resources such as equipment, builidings/factories (to complete its processes), fermenting vats and conveyor belts

service:

• tend to make more use of human resources and information
• use less capital equipment and materials

e.g. commonwealth bank uses human resources in the form of bank tellers, mobile lenders, financial advisers, managers and lawyers as well as buildings (bank branches) and computers where information can be stored and retrieved

• information provided by market research companies to assist in product design and delivery

Question 8

define processes

Answer 8

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

Question 9

explain the differences between the processes of manufacturing and service businesses

Answer 9

manufacturing:

• converts the inputs into a tangible product (goods that can be touched)
• processes are highly automated and mechanised
• uses machinery, robots and computers

e.g. yakult uses mixing (of milk, bacteria, sugar and water), fermentation of the mixture using machinery, quality control and packaging processes
e.g. sony uses design, manufacturing and assembly processes

service:

• converts the inputs into a intangible product (services that cannot be touched)
• rely heavily on interaction with the customer
• processes tend to be more labour intensive (human resources are crucial to operations)

e.g. commonwealth bank ensures good customer service, the computer systems work and establishes bank systems and procedures

Question 10

define outputs

Answer 10

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

Question 11

explain the differences between the outputs of manufacturing and service businesses

Answer 11

manufacturing:

• goods are sometimes classed as homogenous, which means that they are all basically the same or similar

e.g. yakult’s output is fermented milk drink

service:

• services tend to be differentiated, that is, they are provided to individual customers and are modified to suit each customer

e..g. commonwealth bank’s output is the delivery of financial services to customer

Question 12

inputs, processes and outputs of a doctor’s office

CFT example

Answer 12

at a doctor’s office the inputs would be the building, the medical equipment and the labour of doctors and nurses

at a doctor’s office the processes would be assessing patients, doing medical tests, prescribing medication and billing

at a doctor’s office the output would be patients whose needs have been diagnosed and who are healthier than before

Question 13

differences between the characteristics of manufacturing and service businesses

Answer 13

manufacturing

• produce goods that are tangible (can be touched)

service

• produce services that are intangible (cannot be touched

-

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

• manufactured goods tend to be homogenous or standardised

service

• services tend to be differentiated or tailored to individual customers

-

manufacturing

• production process and consumption process are not linked

service

• production process and consumption process typically occur at the same time

Question 14

distinguish characteristics between a doctor’s office and car manufacturer

CFT example

Answer 14

a manufacturing business produces tangible goods, meaning they can be touched and stored, such as a car. the outputs of a service businesses on the other hand cannot be touched or stored, such as a doctor’s visit

manufactured goods are often standardised, such as finished cars which are all identical, whereas services are often tailored to individual customers, such as treating a patient with a bad back and another with a cold

manufactured goods required no customer input, such as cars which are produced overseas in a factory, while services require the customer to be present as part of the production process, such as the patient being with the doctor so they can be examined

Question 15

state the six technological development strategies

ARC CAO

Answer 15

automated production lines
robotics
computer-aided design (CAD)
computer-aided manufacturing techniques (CAM)
artificial intelligence
online services

Question 16

define automated production lines

Answer 16

comprises machinery and equipment arranged in a sequence with components added to a good as it proceeds through each step, with the process controlled by computers

• consists of machinery (often robotics) and equipment arranged in a sequence, usually on a conveyor belt
• as a good passes along the line, the machinery will add components to it
• all or part of the process is automatic, and self-operating or controlling
• computers manage the process and humans are likely to be given the task of monitoring the operations system

Question 17

automated production lines in relation to improving effectiveness and efficiency

advantages

Answer 17

effectiveness

• the use of robotics allows for a degree of precision, accuracy and speed in production, which would generally be unmatched by human labour
• the use of robotics allows production to continue for long periods in conditions that might be considered unacceptable for employees (repetitive, difficult or even dangerous)

increased quality, improved safety

efficiency

• allows a business to produce at faster rates, resulting in higher output and increased productivity
• reduced need for human labour allows a business to produce at reduced cost and increased productivity

perform tasks quicker than humans, fewer human resources, reduced waste due to improved accuracy