Operations Management - Making Operational Decisions 1

Operation Decision and Targets

• Effective operations involve planning, organising + coordinating firms resources to provide goods + services in efficient + appropriate way to meet customer needs and firm objectives
• To do this managers make sure:
  • Right amount of people + equipment available
  • Whether to accept order or not
  • Right level of quality materials used
  • Max level firm needs to be able to produce (Capacity)

Capacity Utilisation

• Percentage of a firms total possible production level being reached
• Capacity Utilisation = Actual Output divided by Maximum possible out put x 100
• The amount it could increase by is known as Spare Capacity
• No ideal target percentage but many say…