unit 4-decision making to improve operational performance

Question 1

Operational objectives

Answer 1

targets set for production

Question 2

What are the 8 operational objectives?

Answer 2

efficiency, quality, costs, flexibility, innovation, environment,speed of response, dependability.

Question 3

Efficiency

Answer 3

Aims to make better use of resources in order to reduce costs and increase profit.

Extra: This might increase capital utilization increasing output so it’s maximum amount of goods the firm could produce with current levels of machinery and staff.

Question 4

Quality

Answer 4

This type of objection is like to involve either maintaining or improving levels of quality.

Question 5

Costs

Answer 5

Many firms aims to cut their costs especially if they compete on price.

Question 6

Flexibility

Answer 6

Business needs to be able to react to what customers want.

Question 7

Innovation

Answer 7

Business can set their research and development department innovative objectives.

Extra: innovation refers to the creation and implementation of new ideas, products, ect.

Question 8

Environment

Answer 8

Pressure from customers and the Government often leads to firms setting environment targets.
E.g using greater number of recycled raw material.

Question 9

Speed of response

Answer 9

The speed of the business can operate is important. This means decreasing the production time of a production, decreasing waiting time for customers or getting new products to markets more quickly.

Question 10

Dependability

Answer 10

Customers need to be able to depend on a business and businesses need to be able to depend on their suppliers.

Question 11

Why is it important for a business to set operational objectives?

Answer 11

Setting operations objectives can help a company achieve its overall objectives- operational decisions will become focused on meeting these objectives.

Question 12

Added value

Answer 12

Added value is a key operational objectives for any business.

↳ business transform raw materials into finished products to sell. Adding Value means increasing the difference between the cost of the raw materials and the price that the customers pays. Adding value will usually profit.

Question 13

Added value (formula)

Answer 13

added value= sales revenue-costs of brought goods and services

Question 14

How can added value be achieved?

Answer 14

Added value can be achieve by either increasing the selling price of the product or by reducing the costs of raw materials.

Extra: customers will pay more for better quality products, but there are others ways to increase the value of product - e.g business being environmentally friendly, offer quick speed of response and dependable then it can justify higher selling price than its competitors.

Question 15

Operational objectives are influenced by…

Answer 15

Internal and external factors.

Question 16

Name the internal factors (in terms of operational objectives)

Answer 16

> Nature of product
Availability of resources
Other departments
Overall objectives

Question 17

Name the external factors (in terms of operational objectives)

Answer 17

> competitors’ performance
market conditions
demand of product
changing customer needs
new technology

Question 18

Methods of production, define production

Answer 18

Process in which raw materials, components and finished goods are converted into new goods or services.

Question 19

What does the choice of production depend on?

Answer 19

The product being produce, the size of the market, the size of the business, the financial available, the technology available.

Question 20

Job production

Answer 20

Production of one-off items by skilled workers(making one thing at a time).
Used for individuals, unique products.
When work on one product is finished, production of another can begin.
E.g ships, bridge, made to measure clothes, wedding cake.