Business Notes Essay

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Business Studies: Operations Role of Operations Management * Operations: The business processes that involve transformation or, more generally, ‘production’. Involves; * Transformation: Is the conversion of inputs (resources) into outputs (goods and services). * Value adding: is the creation of extra or added value as inputs are transformed into outputs. * Lean production: Aims to eliminate waste at every stage of production. * Manufacturing: Process in turning raw materials to finished goods. * Services: Process involved in carrying out the service. Inputs for Goods | Inputs for Services | * Ideas * Resources * Labour * Capital | * Skill * Education * Time * Technology | Strategic Role of Operations * Strategic role of operations involves operations managers contributing to the strategic direction or strategic plan. * Strategic: Means “Affecting all key business areas”^ * Overachieving goal of business is to maximise profits – focus on revenue and costs. * Profit Centres: Aspects of the business that derive income. * Cost Centres: Aspects that do not directly derive income but incur costs – all business functions! * Cost Leadership: Aiming to have the lowest cost or to be the most price-competitive in the market. * Economies of Scale: Cost advantage that is created as a result of an increase in the scale of business operations. (Through lower per unit costs). * Product Differentiation: Distinguishing products in some way from its competitors. Goods and/or Services in Different Industries * Standardised Goods: Are those that are mass produced, usually on an assembly line. * Customised Goods: Are those that are varied according to the needs of the customer. * Goods may be perishable, short life-span (Bread, Milk) or non-perishable long life-span (Clothes,

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