Operational Strategies

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  • Operational Strategies
    • Operational objectives are the targets pursued by the operations department of a business
    • Quality is an important operational target and may encompass minimising faults and implementing quality standards
    • Other operational targets include innovation, increasing efficiency and protecting the environment
    • Internal influences on operational objectives include the businesses finanial position and corporate objectives
    • Economies of scale benefit businesses by reducing unit costs as output rises, allowing price reductions without reducing profit margins
    • Firms choose a mix of resources to use in production and may not opt to be labour intensive or to rely on capital (Capital intensive)
    • Innovation is the development of new ideas and their conversion into sucessful products and processes.
    • The location of a business depends on a variety of factors, including availability of supplies, transport links and proximity to markets.
    • Most businesses seek the lowest cost location and increasingly this involves multi site locations, often in a number of countries
    • Lean production encompasses a range of processes designed to use fewer resources
      • Simultaneous engineering
      • Just in time
      • Critical Path Analysis
    • CPA is a planning technique that allows businesses to complete complex projects as quickly as possible
    • The weaknesses of CPA is its reliance on estimates of time durations which are difficult to forecast
    • JIT manufacturing is a philosophy based on eliminating waste and uses minimal resources to satisfy demand.
    • Kaizen means continuous improvement. Its successful use can improve productivity levels and a businesses competitivness


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