Operations

Question 1

Outline the different operational objectives

Answer 1

1. reducing unit costs
2. increase quality
3. response speed + flexibility
4. dependability
5. environmental
6. create added value

Question 2

Describe reducing unit costs objective

Answer 2

• higher profit margins (if price stays the same)
• allows for price reduction for competition
  -can target fixed costs or variable costs (e.g. suppliers, rents, etc.)
• increase scale (amt of output) = ^ economies of scale (^ specialization = ^ saving costs)

Question 3

Describe increasing quality

Answer 3

• ^ customer satisfaction = ^ reputation of the brand
• v price sensitivity (^ price = ^ revenue)
  — consider recalls complaints

Question 4

Describe response speed and flexibility

Answer 4

• how quickly to fulfill customer’s needs + queries
• meeting delivery agreements e.g. e commerce
• can avoid negative publicity
• flexibility: can change to customer needs changing
  (e.g. output levels, range/choice, new product)

Question 5

Describe dependability

Answer 5

• durable fresh etc_ have what they want

Question 6

Describe environmental