Professional Documents
Culture Documents
Operations Planning
Operations Planning
Operations Planning
Operations planning
Objectives
Explain the need for operations planning
Analyse the influence of marketing, resources and
technology on operations decisions
Explain the need for flexibility and process innovation
Differentiate between different production methods:
job, batch, flow, mass customisation
Evaluate the factors that determine production
methods used in different situations and explain the
problems in changing method
Assess the importance of location decisions to the
success of a business and evaluate the factors that
influence location and relocation decisions
Explain why businesses may want to increase scale
of production
Analyse the importance of economies and
diseconomies of scale and the impact on unit costs
Introduction to operations
planning
Operations planning is preparing input
resources to supply products to meet
expected demand
http://www.youtube.com/watch?v=G
pektVh6aFw
Production methods
Job production – producing a one-off item specially
designed for the customer
http://www.tutor2u.net/business/videocase
s/videocase-cricketbats.pdf
Flow production
Main mass production of standardised
feature products
Essential specialised, often expensive, capital
requiremen equipment – but can be very efficient
ts
high steady demand for standardised
products
Main low unit costs due to constant working
advantage of machines, high productivity and
s
economies of scale
Main inflexible – often very difficult and time
disadvanta consuming to switch from one type of
ges
product to another
expensive to set up flow-line machinery
Flow production
Main mass production of standardised
feature products
Essential specialised, often expensive, capital
requiremen equipment – but can be very efficient
ts
high steady demand for standardised
products
Main low unit costs due to constant working
advantage of machines, high productivity and
s
economies of scale
Main inflexible – often very difficult and time
disadvanta consuming to switch from one type of
ges
product to another
expensive to set up flow-line machinery
Flow production
How Jaffa cakes are made
http://www.tutor2u.net/blog/index.php/business-stu
dies/comments/a-cracking-business-lesson-video-on-
my-favourite-product-jaffa-cakes
http://www.tutor2u.net/business/videocases/videocas
e-eastereggs.pdf
http://www.tutor2u.net/business/videocases/videocas
e-mass-market-housing.pdf
Production
Production Process in Action – 2010 World
Cup Football
http://www.tutor2u.net/blog/index.php/busi
ness-studies/comments/production-
process-in-action-the-2010-world-cup-
football#extended
Recent improvements in
production methods
Advances in technology such as computer-
aided design (CAD) and computer-aided
manufacturing (CAM) have allowed much
quicker developments of new products,
designs that feature common components,
and robotic machinery that can be
switched to making a range of parts – not
just one
Recent improvements in
production methods
Technology in action: inside the transparent factory
http://www.tutor2u.net/blog/index.php/business-
studies/comments/technology-in-action-inside-the-
transparent-factory
http://www.tutor2u.net/business/videocase
s/videocase-smart-production.pdf
Location decisions
An optimal location means a business location that
gives the best combination of quantitative and
qualitative factors
Safety
Room for further expansion
Ethical considerations
Environmental concerns
Infrastructure
Advantages and disadvantages
of multi-site locations
Multi-site location means a business that
operates from more than one location
http://www.tutor2u.net/blog/index.php/bu
siness-studies/comments/video-case-
study-twinings-offshores-tea-production
Issues and potential problems
with international location
http://www.tutor2u.net/blog/index.php/bu
siness-studies/comments/enterprise-locat
ion-and-culture-inside-the-new-google-ca
mpus-in-london
Scale of operation
The scale of operation is the maximum
output that can be achieved using the
available inputs (resources) – this scale can
only be increased in the long term by
employing more of all inputs
http://www.tutor2u.net/blog/index.php/gcse-economics/co
mments/how-crisps-are-made-technological-economies-of-s
cale
http://www.guardian.co.uk/business/video/
2009/nov/20/amazon-fulfilment-centre
Diseconomies of scale – big
can be inefficient too
Diseconomies of scale means the factors
that cause average costs of production to
rise when the scale of operation is increased
______________________________________________________
________________________________
Identify and briefly explain two factors that suggest
economies of scale ______________________________
______________________________________________________
________________________________
Identify one factor that clearly suggests diseconomies
of scale. Briefly explain your answer. ________________
______________________________________________________
______________________________________
Operations planning: Multiple
Choice
Accurate sales forecasts will help operations managers to
achieve all of the following except:
a keep stock levels to a minimum
b reduce wastage of production
c maximise output
d match output closely to demand levels.
a flow production
b batch production
c job production
d mass customisation.
Operations planning: Multiple
Choice
Which of the following is an advantage of job production
relative to batch production?
a The work is more likely to motivate workers.
b It provides the opportunity to take advantage of economies of
scale.
c There is greater division of labour.
d It allows a higher level of demand to be met.
a indivisibilities
b the ability to employ specialist functional mangers
c bulk buying
d lower interest rates for large-scale finance