3.4 Decision making to improve operational performance

Students should consider the following throughout this section of the specification:

how developments in technology are affecting decision making and activities in operations (eg more online businesses, better links with customers, suppliers and inventory control)
ethical and environmental influences on operations decisions
market conditions and competition
how decisions in operations improve the competitiveness of a business
the interrelationship between operational decisions and other functions.

Setting operational objectives

Content	Additional information
The value of setting operational objectives	Operational objectives include: costs quality speed of response and flexibility dependability environmental objectives added value.
External and internal influences on operational objectives and decisions

Content

Additional information

The value of setting operational objectives

Operational objectives include:

External and internal influences on operational objectives and decisions

Content	Additional information
Interpretation of operations data
Calculation of operations data	Students should be able to calculate: labour productivity unit costs (average costs) capacity capacity utilisation.
The use of data in operational decision making and planning

Content

Additional information

Interpretation of operations data

Calculation of operations data

Students should be able to calculate:

The use of data in operational decision making and planning

Content	Additional information
The importance of capacity
The importance of efficiency and labour productivity
How to increase efficiency and labour productivity
The benefits and difficulties of lean production	Lean production should include 'Just in Time' operations.
Difficulties increasing efficiency and labour productivity
How to choose the optimal mix of resources	The mix of resources should include an understanding of labour and capital intensive processes.
How to utilise capacity efficiently
How to use technology to improve operational efficiency

Content	Additional information
The importance of quality
Methods of improving quality	Methods of improving quality should include quality assurance.
The benefits and difficulties of improving quality
The consequences of poor quality

Content	Additional information
Ways and value of improving flexibility, speed of response and dependability	An understanding of flexibility should include mass customisation.
How to manage supply to match demand and the value of doing so	Ways of matching supply to demand include: outsourcing use of temporary and part time employees producing to order.
Influences on the amount of inventory held	Inventory control should include: interpreting inventory control charts lead time re-order levels buffer level of inventory re-order quantities.
Influences on the choice of suppliers
How to manage the supply chain effectively and efficiently and the value of this
The value of outsourcing