CAIE A-Level Business 4.1.1 Transformation process

Analyse two ways in which operations contributes to added value in a business.

Indicative content

Responses may include:

AO1 Knowledge and understanding

- Operations is the harvesting of value from the assets owned by a business - the concept can refer to the production and transformation process in a business or in a broader sense to all the operations in a business

- Added value is the difference between the price of a finished good and the cost of the inputs in making it - added value - can be achieved in different ways - building a car in an innovative way or building the brand of a business

The ways operations contributes to added value in a business include:

- To satisfy customers

- Produce quality goods

- Ensure production process is efficient

- Ensure supply chain is efficient

- Ensure all functional business areas contribute

AO2 Application

- The goal of operations is to add value - essentially be strengthening the relationship between the organisation and its customers - the aim of all the functional areas in a business

- Main aim is to ensure the business produces quality products that can satisfy the needs of customers on a regular basis-the production process is involved as is marketing and human resources

- Production process in a manufacturing business - converting raw materials into a cell phone

- Marketing operations - promote the quality of a product and the customer prepared to pay the price

- Human resources - the right employees are hired, trained, and equipped to add value with front line superb service in a service business

6(a)

AO3 Analysis
- Manufacturing business adds value through its production process - raw
materials into finished products - sources quality materials from suppliers
- new cars come off the production line assembled by robots
- Production takes copper, plastic, lithium - converts into smart phones -software specialists increase functionality with up- grades
- Marketing operations - promote the business reputation for quality and
establish a USP to differentiate and add value
- Marketing operations - improve the supply chain to deliver excellent
delivery systems to attract customers
- Inventory operations - focus on appropriate order and storage system to
make the transformation system more efficient
- Lean management/right first time efficiency systems - used to reduce
waste and add value
Accept all valid responses