Operational objectives

• What are 6 types of operational objectives?

  1. Costs
  2. Quality
  3. Speed of response and flexibility
  4. Dependability
  5. Environemental objectives
  6. Added value
• Internal influences on operational objectives?

  • Corporate objectives
  • Finance
  • Human Resource
  • Marketing
• External influences on operational objectives?

  • Economic environment (market conditions)
  • Competitor efficiency flexibility
  • Technological change (advancements)
  • Legal change (e.g. regulatory requirements)
  • environmental change
• Why is speed of response and flexibility an operational objective?

  • Avoid negative publicity
  • Adaptability to a new trending product can boost sales and improve brand image
• Why is adding value an operational objective?

  • This increases the distance between price and unit costs, widening the profit margins and setting a USP (innovation)
• What are 4 types of quality measures

  1. Customer satisfaction ratings
  2. Complaints
  3. Scrap rate
  4. Punctuality
• What are the two types of customer satisfaction ratings?

  • Quantitative
  • Qualitative
• Why is it important to avoid complaints as a business?

  Impact on reputation
• Why is recording the scrap rate important?

  Wasted product -> money lost -> increase unit costs
• What is the scrap rate?

  Percentage of rejects through manufacturing process
• What is the formula for unit costs?

  $\frac{Total\ Costs}{Output}$
• What are unit costs influenced by?

  • Efficiency (workforce + machinery)
  • Production volume within its resources
  • Economies of scale
  • Technology