4.1 Operational Objectives (AQA A Level Business): Flashcards
Exam code: 7132
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Define operations management.
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Define operations management.
Operations management is the planning, organisation and control of how goods or services are produced — the right quality and quantity, on time, at the right cost.
Give an example of an operational objective.
Reducing unit costs, improving quality, or achieving a certain level of output.
Name two tasks operations management is responsible for.
Designing/improving processes, capacity planning, stock management, supply chain, quality control, and continuous improvement (any two).
How does operations support the marketing function?
It delivers the product quality and lead times promised in adverts (e.g. ASOS extending warehouse cut-offs for next-day delivery).
How does operations support the finance function?
Efficiency savings (lower unit costs, less waste) help hit profit targets and improve cash flow (e.g. Toyota's lean production).
Operations is often called the ' room' of a business, but it must coordinate with other functions.
Operations is often called the 'engine room' of a business, but it must coordinate with other functions.
What does 'capacity planning' involve?
Determining the production capacity needed to meet customer demand, using historical data and forecasts.
Why must operations coordinate with HR?
HR provides safe working methods, sets shift patterns, and delivers on-the-job training for production staff.
Operations aims to deliver the right quality and quantity to customers on time and at the right .
Operations aims to deliver the right quality and quantity to customers on time and at the right cost.
True or False?
Operations management works in isolation from other business functions.
False.
Operations must coordinate with marketing, finance, HR and customer service to run smoothly.
True or False?
Continuous improvement (Kaizen) is part of operations management.
True.
Operations managers encourage a culture of continuous improvement (Kaizen) among employees.
How can operations reduce customer complaints and returns?
Through fast, accurate order fulfilment (e.g. Apple revising packaging after scratched-phone complaints).
Name three areas operational objectives typically focus on.
Costs, quality, speed of response, flexibility, environmental impact, and added value (any three).
Give an operational objective a business might set to reduce costs.
Raise capacity utilisation, improve labour productivity, lower inventory holding, or achieve economies of scale.
How does raising capacity utilisation reduce costs?
It spreads fixed costs over more output, lowering the unit cost.
Give an operational objective a business might set to improve quality.
Reduce defects, gain a quality certificate (e.g. ISO 9001), boost satisfaction scores, or improve supplier quality.
Define flexibility (in operations).
Flexibility is a business's ability to switch products or change output quickly when demand or tastes change.
Why does speed of response matter?
Modern buyers expect rapid delivery; cutting lead times keeps customers satisfied and gives a competitive edge.
How can a multi-skilled workforce improve flexibility?
Staff can fill gaps or swap tasks quickly when demand changes (e.g. trained on at least two machines).
Why do businesses set environmental operational objectives?
To meet stricter laws and rising energy costs, save money, and gain environmentally conscious customers.
IKEA has an environmental objective to be climate by 2030.
IKEA has an environmental objective to be climate positive by 2030.
Define added value.
Added value is the difference between the price charged to the customer and the cost of the inputs used to make the product.
Give an example of added value.
Customers pay more for oven chips than for a bag of whole potatoes — value is added through processing.
If value is not added to materials, fixed costs cannot be paid and no is made.
If value is not added to materials, fixed costs cannot be paid and no profit is made.
True or False?
Operational objectives are usually long-term goals.
False.
Operational objectives are short-term goals set by the operations function.
True or False?
Improving labour productivity lowers wage costs per unit.
True.
Fewer labour hours are needed for the same output, lowering wage costs per unit.
How can preventative maintenance support operations?
Weekly machine checks reduce unexpected breakdowns, keeping production running and orders on schedule.
Lowering inventory holding through just-in-time deliveries frees up and cuts storage costs.
Lowering inventory holding through just-in-time deliveries frees up cash and cuts storage costs.
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