Unit 4 - Decision Making To Improve Operational Performance Flashcards
Operations management
Converts resources and labour into goods and services
Operational objectives
Targets a business sets in order to produce goods or services in the most efficient way in a given time
Examples of operations management
Reduced unit costs
Quality targets
Speed of response and flexibility
Dependability
Ethical and/or environmental objectives
Reasons for choosing the objective reduce unit costs and how could it be achieved
Higher profit margins
By reducing the unit costs
Reasons for choosing the objective ‘increase quality’
Higher customer satisfaction
Better PED so higher brand loyalty
Reasons for choosing the objective ‘speed of response and flexibility’ and how could it be achieved
Reduce customer queries
Can be done by reducing negative publicity and meet delivery agreements
Reasons for choosing the objective ‘dependability’
Safer to invest
Reasons for choosing the objective ‘environmental issues’ and how could it be achieved
Consider environment
Can be done by reducing pollution
Reasons for choosing the objective ‘create added value’ and how could it be achieved
Lower unit costs
Can be done by improving product quality which can lead to a usp and therefore added value
Internal influences on operational objectives and decisions
Corporate objectives
Finance
Human Resources
Marketing issues
External influences on operational objectives and decisions
Economic environment
Competitors efficiency and flexibility
Technological change
Legal and environmental change
Why are corporate objectives an internal influence
Corporate objectives should not conflict with operational objectives
Why is finance and internal influence
Operational decisions often involve significant investment and cost. Therefore the financial position of the business directly affects the choices available
Why are competitors effiency and flexibility an external influence
Quicker, more efficient or better quality competitors will place pressure on operations to deliver at least comparable performances
Why is legal and environmental change an external influence
Greater regulations and legislation of the environment places new challenges for operations objectives
