Business studies - Operations Set 1

STRATEGIC ROLE OF OPERATIONS

What are the TWO strategic roles of operations, and what does each one aim to achieve?

Cost leadership = being the lowest-cost producer.

Differentiation = making products unique through quality or innovation.

If a business wants to achieve cost leadership, what must operations focus on?

Improving efficiency, reducing waste, automating tasks, and producing at scale to lower unit costs.

How does differentiation change the operations process?

Operations must improve quality, design, innovation, and consistency to make the product stand out.

How does globalisation influence a business’s operations?

It forces operations to manage global supply chains, compete internationally, and maintain consistent production across countries.

Why does new technology often force businesses to change their operations?

Because technology improves speed, accuracy, efficiency, and reduces labour costs, so operations must adapt to stay competitive.

What must operations do when customer quality expectations increase?

Increase quality control, improve materials, enhance processes, and maintain product consistency.

Why does cost-based competition impact operations?

Because operations must lower production costs to stay competitive, which requires efficiency improvements and waste reduction.

How can government policies force a business to change its operations?

Policies require new safety, training, or environmental standards, so operations must adjust their processes to comply.

What happens to operations if a business fails to meet legal regulations?

They risk fines or legal action, so operations must follow WHS, food, labour, and consumer laws.

How does environmental sustainability change the operations function?

Operations must reduce waste, energy use, emissions, and use environmentally friendly materials.

How does CSR influence operations beyond legal requirements?

Operations adopt ethical practices like fair sourcing, charity involvement, and extra sustainability measures.

Explain the difference between legal compliance and CSR using one sentence.

Compliance is obeying the law, while CSR is choosing to act ethically beyond what is legally required.

What are inputs in the operations process?

The resources used in production, including materials, labour, equipment, and information.

What is the transformation process in operations?

The activities that convert inputs into outputs through value-adding steps.

What are outputs?

The final goods or services delivered to the customer after the transformation process.

How do quality control and quality assurance differ?

Quality control checks finished products, while quality assurance improves processes to prevent defects.

What is Total Quality Management?

A continuous improvement approach where all employees work to maintain high quality in every stage of operations.

Why do economies of scale lower production costs?

Because producing in larger volumes spreads costs over more units, reducing the cost per unit.

How does the JIT inventory system reduce costs?

By having stock arrive only when needed, reducing storage costs and waste.