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4. Operations management

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6 topics · 9 learning objectives

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  1. 4.1. Production of goods and services

    1. 4.1.1Production processes

      • calculate labour productivity • why efficiency is important for a business • how to increase efficiency, e.g. increasing automation and technology, improving labour skills • concept of lean production and how to achieve it: just-in-time (JIT) inventory control and Kaizen • advantages and disadvantages of lean production methods • why businesses hold inventory • factors affecting how much inventory businesses hold

    2. 4.1.2The main methods of production

      • job, batch and flow production • advantages and disadvantages of job, batch and flow production • recommend and justify an appropriate production method for a given situation

  2. 4.2. Technology and production of goods and services

    1. 4.2.1

      • how technology is changing production methods through automation and mechanisation, e.g. Computer-Aided Manufacture (CAM) and 3D Printing • how technology is improving productivity in the service sector, e.g. contactless payments • advantages and disadvantages of changes in technology for businesses and employees

  3. 4.3. Sustainable production of goods and services

    1. 4.3.1

      • how businesses can be more sustainable: using renewable energy, using fewer resources / less waste, reusing, recycling, developing environmentally friendly products, using environmentally friendly packaging • advantages and disadvantages of businesses becoming more sustainable

  4. 4.4. Costs, scale of production and break-even analysis

    1. 4.4.1Identify and classify costs

      • classify and calculate costs using examples, e.g. fixed, variable, average and total • use cost data to help make simple decisions, e.g. which product to produce, whether to continue or stop production, what price to set, help choose suppliers

    2. 4.4.2Economies and diseconomies of scale

      • concept of economies of scale: purchasing, marketing, financial, managerial, technical • concept of diseconomies of scale: poor communication, lack of commitment or loyalty from employees, weak coordination, lack of control

    3. 4.4.3Break-even analysis

      • concept of break-even • complete or amend a simple break-even chart • interpret a break-even chart • calculate break-even output • define, calculate and interpret the margin of safety • use break-even analysis to help make decisions: effect of changes in price, changes in fixed costs, changes in variable cost per unit • limitations of break-even analysis

  5. 4.5. Quality of goods and services

    1. 4.5.1

      • what quality means and why it is important for businesses • concept of quality control • concept of quality assurance • advantages and disadvantages of quality control and quality assurance • recommend and justify whether to use quality control or quality assurance in a given situation

  6. 4.6. Location decisions

    1. 4.6.1

      • factors which influence the location decisions of a manufacturing business • factors which influence the location decisions of a service business • factors that a business could consider when deciding which country to locate its operations in • recommend and justify an appropriate location for a business in a given situation