Setting operational objectives

Question 1

What would an operational objective about quality be likely to involve?

Answer 1

Maintaining or improving levels of quality. E.g. aim to reduce the number of customer complaints each month.

Question 2

What are operational objectives?

Answer 2

Targets set for production

Question 3

Why do companies set operational objectives?

Answer 3

They can help a company achieve its overall objectives - operational decisions will become focused on meeting these objectives.
The performance of the production department can be reviewed and assessed on it’s ability to meet these operational objectives.

Question 4

What would an operational objective about costs be likely to involve?

Answer 4

Cutting costs, especially if the company competes on price.

Question 5

What are the different ways to achieve an objective about costs?

Answer 5

The firm can cut its fixed or variable costs e.g. the firm might restructure to remove a layer of management, or the costs of an individual product can be reduced.

Question 6

What would an operational objective about flexibility be likely to involve?

Answer 6

Business need to be able to react to what the customers want. e.g. varying the amount of goods or services that they are producing so that volume doesn’t exceed demand or vice-versa.

Question 7

What would an operational objective on efficiency be likely to involve?

Answer 7

They may aim to make better use of resources in order to reduce costs and increase profit.

Question 8

How can a business achieve an efficiency objective?

Answer 8

They can increase capacity utilisation or take steps to improve labour and capital productivity.

Question 9

What would an operational objective on innovation be likely to involve?

Answer 9

Businesses can set their research and development department innovation targets e.g. an objective to create a new product within a period of time

Question 10

What is a problem with innovation operational objectives?

Answer 10

They can be hard to achieve, as unexpected problems often occur.

Question 11

What would an operational objective about the environment be likely to involve?

Answer 11

Cutting carbon emissions or using a greater number of recycled raw materials.

Question 12

Why would a business set an operational objective about the environment even if they weren’t concerned with it?

Answer 12

Pressure from customers and the Government.

Question 13

What would an operational objective about the speed of response be likely to involve?

Answer 13

Decreasing the production time of a product, decreasing the waiting time for customers or getting new products to market more quickly.