Operations Objectives (AQA A Level Business): Flashcards
Exam code: 7132
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Define operations objectives.
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Cards in this collection (25)
Define operations objectives.
Operations objectives are the specific, measurable targets that guide how the operations function is managed.
Which operations objective is likely to be the main priority if a business's corporate goal is premium positioning?
If the corporate goal is premium positioning, quality is likely to be the main operations objective.
True or False?
Operations objectives are shaped only by the business's own internal goals.
False.
Operations objectives are shaped by both internal and external factors, including market conditions, competitors, legal requirements and the supply chain.
Define productive efficiency.
Productive efficiency is producing at the lowest cost per unit, achieved when a business makes full use of its capacity and minimises waste.
________ efficiency means producing the right goods in the right quantities to match customer demand.
Allocative efficiency means producing the right goods in the right quantities to match customer demand.
Define quality.
Quality is the degree to which a product or service meets or exceeds customer expectations.
True or False?
Quality control is a preventive approach that builds quality checks into every stage of production.
False.
Quality control inspects products at the end of the production process, so it is reactive. Building checks into every stage is quality assurance.
Define Total Quality Management (TQM).
Total Quality Management (TQM) is a company-wide commitment to continuous improvement in which every employee takes responsibility for quality at every level of the organisation.
What are the consequences of overproduction for a business?
Overproduction leads to excess inventory, increased storage costs and potential waste. This is particularly serious for businesses handling perishable goods.
Which method of production makes groups of identical products together before switching to a different product?
This method is batch production, such as a bakery producing white loaves and then switching to seeded loaves.
____ flexibility is the ability to increase or decrease production levels without major disruption or cost.
Volume flexibility is the ability to increase or decrease production levels without major disruption or cost.
Why can poor environmental performance reduce a business's access to funding?
Investors increasingly apply ESG (Environmental, Social and Governance) criteria when deciding where to place their capital. Businesses with poor environmental performance may therefore struggle to attract investment.
Define value added.
Value added is the difference between the selling price of a product or service and the cost of the inputs used to create it.
Value added = Selling price − Cost of inputs
True or False?
Packaging and positioning can add perceived value even when a product is similar to a competitor's.
True.
The way a product is packaged and positioned shapes how customers see it. This can create perceived value even where the product itself is similar to a competitor's.
Why can poor operational performance damage the work of the marketing function?
Delays, defects or stockouts undermine the brand image that marketing works to build. If operations cannot deliver what marketing has promised, customer expectations are not met.
True or False?
The finance and operations functions always share the same priorities.
False.
Finance may prioritise cost reduction targets that conflict with operations objectives such as quality. Managing this mismatch requires coordination between the two functions.
What must human resources manage when a business introduces automation?
HR must manage retraining programmes or, where roles are removed, redundancy processes.
_______________ caused by poor employer-employee relations can stop production entirely.
Industrial action caused by poor employer-employee relations can stop production entirely.
Why does a decision to increase output require input from the finance function?
Increasing output requires financial planning around working capital and cash flow.
How do efficient operations improve a business's cost competitiveness?
Efficient operations reduce unit costs. This allows the business to offer lower prices than rivals, achieve a higher profit margin at the same price, or both.
True or False?
As well as improving its reputation, high quality can reduce a business's costs.
True.
Good quality reduces the cost of defects, returns and complaints. This frees up money to be deployed elsewhere in the business.
Why is speed and reliability of delivery an important competitive factor in e-commerce?
Businesses that fulfil orders faster and more reliably than rivals create an advantage that is difficult to replicate without significant investment.
The ability to adapt production quickly to changing customer needs is known as _________, and it allows a business to respond to market changes faster than less agile competitors.
The ability to adapt production quickly to changing customer needs is known as flexibility, and it allows a business to respond to market changes faster than less agile competitors.
How can strong environmental credentials improve a business's competitiveness?
They attract customers and investors concerned about sustainability. Demonstrating genuine environmental responsibility can also justify high prices.
What is the risk for a business that is unable to scale up production when demand grows?
It may miss market opportunities and lose market share to competitors that can increase production rapidly.
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