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…


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