Operational Strategies; Unit 3 - Notes

Notes made from a combination of resources including the Malcolm Surridge text book and Philip Allan revision guide.

Covers the operations quarter of the course; Operational Objectives, Scale and Resource Mix, Innovation, Location and Lean Production

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Understanding Operational Objectives
Operations Management:
The planning organising and coordination of activities involved in the production of a firms product or
Management of the whole process that transforms inputs into outputs and adds value
Operational decisions:
Where to produce?
What scale facilities are needed?
What production methods should be…

Page 2

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Aims to deliver appropriate quantities of what customers need at suitable levels of quality and
suitable cost

Need to consider:
Who they are working with and the relationship
What resources they use and how they use them
Impact of their activities on various groups
Customer demands
Demand for many products…

Page 3

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Corporate objective
Financial restraints
Marketing strategy
Nature of the product

Customer expectations

Increasing Efficiency:
Productive efficient involves:
Employee productivity
Nature of the production process
Degree of innovation
Scale of production
Capacity utilisation
Measure of success with which a firm turns input into…

Page 4

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Capacity depends on:
o Capital available
o Existing level of technology
o Number and skills of employees
An increase in capacity will increase the scale of production
Getting the `right scale' depends on:
Expected level of sales
Costs involved in growing
Resources available
A firm can increase scale by:

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Cost of producing a unit can have significant implication from a firm's competiveness:
Higher revenue
Tactical pricing
Lower costs
Maybe able to price competitors out of the market

Diseconomies of Scale:
A firm expends its capacity and the unit cost increases

Communication Problems:
With more people involved in the firm,…

Page 6

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Agree to produce products for other firms
Close part of its production process and reduce capacity (Rationalisation)

Choosing the Right Resource Mix:
Deciding the best way of producing
Deciding the best resources to use and the combination of resources required
Deciding on where to get resources from
Deciding where to…

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Increasing Productivity:
Increase number of hours worked
Invest in equipment and technology
Changing the way the work is done
Motivating employees

Employee Resistance:
Don't want to work longer and harder
Don't want to learn new skills
Fear higher productivity may lead to job losses
Feel its unfair produce more…

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A failure to innovate may lead to a loss in market share
Aims of innovation:
Develop products that have a USP
Develop better quality products
Develop more efficient wants of producing
Develop better ways of doing things
Helps firms compete by creating more value

Research and Development:
The generation and…

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A firm will want a culture that encourages people to try out ideas, doesn't punish failure and that
rewards those who do come up with new approaches (entrepreneurial culture)
If innovation really is a priority the senior managers need to promote it by doing things like makings
funds available to…

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Implications for Other Functions:
Finance: Initial outlay of capital will be ne returned for a long time
Marketing: Research will be needed to find out whether the innovation project is likely to appeal
HR: Additional recruitment and training may be needed

Location decisions have a direct effect on an…




This 19 page document seems to summarise the entire unit 3 AQA operations management syllabus. Mainly in bullet point form it can form the basis for revision. Highly recommended.

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