Business Management Unit 3 Sac 3

Operations Management

Operations Management

The coordinate of resources within a business to achieve the efficient and effective output of finished goods and services.

Efficiency

How productively a business uses its resources when producing goods or services.

Effectiveness

The extent to which a business achieves its stated objectives.

Goods

A tangible product mode for a customer.

Service

Something intangible produced by a business to meet customer needs.

Productivity

The ratio of outputs produced compared to the inputs required.

Economies of Scale

Occur when a companies production increases in a way that reduces per unit costs.

Benefit of economies of scale

• Goods become cheaper

• More people have jobs, economies grow

Limitations of economies of scale

• Powerful companies pay workers and suppliers less

• Economy is less diversified and stable

Business Competitieveness

IS the ability for one business to outperform its rivals (competitive advantage)

Inputs

Are all the resources that go into a good or service.

Examples of Inputs

• Labour Resources

• Natural Resources

• Capital Resources

• Entrepreneurial ideas

• Time

Manufacturing Business (inputs)

Machinery, Power, Space.

Service Business

Digital software, hours + schedules, labour of employees

Processes

Are what is done to the inputs to transform them into the finished outputs.

Processes (examples)

Melting, mixing, blending, pouring, setting, checking, packaging.

Outputs

Are the final product presented to the customer, either as goods (tangible) or services (intangible).

Tangible

An output that can be physically touched.

Intangible

An output that can’t be physically touched but is experienced by the consumer.

Characteristics of a Manufacturing Business (Tangibility)

Tangible - can be seen and touched.