Business Studies 28/02/2012

BBQ Chicken and jalapenos Chicken - Intermediate Jalapenos - Natural Resource BBQ Sauce - Intermediate Sweetcorn - Natural Resource Cheese - Intermediate Flour - Intermediate Water - Natural Resource Yeast - Intermediate Oven - Capital Goods Chef - Human Resources Inputs - Raw Materials Outputs - Finished Products Clothes Shop Operations Management Make sure there is enough stock Make sure the stock isn't damaged Ensure top quality customer service

Nightclub Operations Management Ensure no underage people Enough Alcohol Security are spread out Quick queues Smoking area

The Transformation Process Describes how inputs are converted into outputs - doing it effectively means ensuring that: The required inputs are there when they are needed. The most effective method of production is used to provide quality products at minimum cost. The firm can produce an appropriate range of goods and services.

Operations Management involves managers making decisions They make decisions about:

How to produce products What people, equipment and machinery are required The level of materials and components the firm needs to have available at any given moment Whether to accept an order and if so how to produce in time and at the right quality The maximum level the firm can produce - this is known as the capacity. Typical Operations Targets Range of products Development of new products Reliability of project Efficiency Quality Standards/ Customer Service Purchasing supplies/ Supplier Relationships The volume of output that needs to be provided e.g. you must have the ability to process 2000 insurance claims a day or be able to serve 300 customers a day in your shop. The quality levels that need to be achieved, e.g. to process all claims within 3 days

Capacity and Capacity Utilisation The capacity of a business is the maximum amount it can produce given its existing resources Capacity Utilisation measures the existing output relative to the maximum. It can be calculated using: Existing Output over a given time period (divided by) Maximum possible output over a given time period x100 = Capacity Utilisation (%)

Example Existing output 300 units a week maximum output 500 units a week. Capacity Utilisation = (300/500) x100 = 60% 50% 54.1%

85% 91.6 %

120 100 86.60 75 66 58.33

Capacity Under Utilisation In this situation the business may: Do nothing Renew its marketing activities to boost demand Reduce the level of capacity Capacity Shortage In this situation the business may: Do nothing Expand Capacity Sub Contract Increase the price

Matching Production to Consumer Demand Periods of slack demand and excess capacity, followed by high demand and full capacity working create special operational difficulties. Employee Resistance to Higher Productivity They do not want to work longer or harder. They do not want to learn new skills. They fear that higher productivity levels may lead to job losses They feel it is unfair that they are producing more unless they receive higher rewards

Improving Competitiveness Competitiveness can be improved by: Reducing the cost per unit so the firm is able to lower its prices

Providing better quality goods which meet the needs of customers more effectively than other firms Producing more reliable goods with fewer faults than competitors Producing goods faster than the competition so they can get them to the customer more quickly Developing new products quickly so that the customers are offered new models or new varieties ahead of competition