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Cost targets

Reducing unit costs:
o Likely to be the primary aim of most businesses in terms of cast targets
o Low unit costs enable a business either to keep prices low or to enjoy a higher profit margin by
keeping prices at their same level
Reducing fixed costs
o…

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The operations department must ensure that its objectives are consistent with the corporate objectives of
the business.

Finance

Operations management objectives rely on considerable expenditure on capital equipment or research and
development.

HR

The skills, training and motivation of a business' human resources will be a major impact on operational…

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Political factors

Operations management departments are often responsible for targets related to minimising production
costs.
This can bring them into conflict with politicians, who may disagree with the methods used to reducer costs,
especially if this involves potential exploitation of workers or unsafe working conditions in factories.

Legal factors

Because…

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The purchase of computer systems can improve efficiency in both production and
administration.
Improvements in communication systems using new technology can enhance customer
service and the working environment, improving the company's operations and its
reputation.
o Specialisation economies
Large firms can afford to employ specialist with particular skills. In smaller…

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o Large firms often have more rigid and inflexible policies. These are imposed to limit the loss of
control described above but reduce the ability to respond quickly to changing customer needs
Communication diseconomies.
o Too many levels of hierarchy in a business can reduce the effectiveness of communication
o…

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Innovation: The successful exploitation of new ideas. Innovation enables businesses to compete effectively in an
increasingly competitive global environment.

Research and development: the scientific investigation necessary to discover new products or manufacturing
processes, and the procedures necessary to ensure that these new products and processes are suited to the needs…

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Company finance
Company culture
Chances of success
Efficiency of innovation




The main factors influencing business location

Technology
o Allows business to be more flexible, operating from much wider choice of location
o Encouraged the use of teleworking, where employees work from home.
Costs of factors of production
o In order…

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o Congestion
The concentration of firms in an area increases travelling times and expenses. Where
delivery times are an essential factor, this may reduce the competitiveness of an
organisation because transport costs will increase and delivery may become unreliable.
o Pollution
The social costs created but these areas nay be…

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Time-based management : an approach that recognises the importance of time and seeks to reduce the level of
`unproductive' time within an organisation. This leads to quicker response times, faster new product development
and reductions in waste, culminating in greater efficiency.

Network analysis: a method of planning business operations in…

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Benefits of critical path analysis

Allows a business to improve the efficiency of its resources. If a business can reduce the time taken to
complete a project, it can translate these savings in time into cost savings. In turn, this will increase the
competitiveness of the business, particularly if cost…

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