Business Homework Operations

Operational Objectives are smart goals set by a business to measure efficiency, productivity and overall operational performance of the business.

Includes:

Cost efficiency

Quality

Flexibility

Internal Influences include corporate objectives, finance, HR and technology this will determine how operations run

External Influences includes economic conditions, technology, laws and competitors

Labour Productivity = total output/ number of employees

Unit costs = total costs/ total output

capacity = maximum output a business can have

Capacity utilisation = output/ maximum possible number of output

Capacity ensures the business can meet customer demand and it helps to manage costs by avoiding over production

Efficiency reduces waste and lowers costs which leads to greater profitability leads to faster production

Labour productivity higher productivity means lower labour costs

Helps business remain competitive by increasing output

Low capacity utilisation

• Flexibility

• Less pressure on resources

• However higher unit costs and wasted resources

High capacity utilisation

• lower unit costs

• Increased efficiency

• However risk of over working staff and limited flexibility

Lean production

• lower costs reduced waste

• Improved quality -kaizen

• However initial costs are high

• Requires cultural changes

Labour productivity

• lower labour costs per unit

• competitive advantage

• However quality issues and employee resistance

Can increase labour productivity by training and development and technology and automation

Capital intensive relies heavily on machinery and robots to assemble vehicles

Reduces labour costs but high initial investment

Labour intensive depends more on skilled workers offers high quality but has higher labour costs and slower production