Operational Decisions

Targets set for production

Maintaining or improving quality

Cutting fixed or variable costs , especially if the business competes on price

Business needs to react to customers needs

Varying the amount of goods or services so that volume doesn’t exceed demand

Make better use of resources to reduce costs and increase profits.

Eg. Increasing capacity utilisation or improving labour and capital productivity

Research and development work on innovation targets

Hard to achieve as unexpected problems can occur

Pressure from customers and government lead to environmental objectives

Speed at which a business can operate / related to efficiency

Eg. Decreasing production time, waiting time ( for customers ) and getting products to market faster

Reliable businesses can often charge more

Customers depend on business, business depends on suppliers

Increasing the difference between the cost of the raw material and the cost that the customer pays

Eg. Wood to a table

Sales revenue - Cost of bought-in goods and services

• Nature of product

• Availability of resources

• Other departments

• Overall objectives

• Competitors’ performance

• Market conditions

• Demand for product

• Changing consumer needs

• New technology

The maximum output with the sources available

( output / capacity ) x 100

A firm uses another firm to do some of their work on their behalf

Firms outsource to meet unexpected increases in demand

Total costs / Units output

Output per period / Number of employees

How much each employee produces

• Improve employee motivation

• Training

• New technology

efficient production that minimises waste

eg. just-in-time, time based management and kaizen

• Reduces waste and costs by having very little stock and processing orders only as they come

Storage costs reduced, cash flow increased, more flexible

Bad for production if suppliers are unreliable

reduces wasted time by being fastest to produce in the market.

• Reduces lead time

• customer satisfied so competitive advantage

• lead to innovation as less time spent on reasearch and development

• Quality may drop with faster production

• easier stock control

• communication

• computer aided design CAD

• computer aided manufacturing CAM

• increased productivity and quality

• reduce waste

• better communincation

• initial costs high

• recquires maintenance

• tech replacing manual work = redundancies

• Cheaper than manual labour in long term

• less human error

• machines can be 24/7

• machines easier to manage than ppl

• high set up costs

• machines usualy one task - less flexi

• break down = long delays

• workers fear being replaced

• people more flexible

• cheaper and smaller scale

• workers can solve problems that arise

• harder to manage people

• ppl are unreliable

• ppl dont work non stop

• quality can be USP

• improve brand image

• more repeat and new customers

• less refunds so time better spent

• assumes errors are unavoidable

• detects errors after then fixes

• errors are avoidable

• prevent errors and get it right first time

• workers responsible for passing on good quality products to next stage in production process

• increased motivation

• better brand image

• less faulty products =less waste

• takes long to introduce

• can demotivate staff if its plenty effort

• training is expensive

members from all levels of businessmeet to solve quality issues .

Can increase motivation and productivity but floor staff may not be listened to by management

all employees improve their quality of work slighlty over time

good for small business as its cheap to introduce and will increase motivation . not good if firm wants quick improvement