3.4.1 operational objectives

Question 1

What are operational objectives?

Answer 1

Specific, measurable goals set for the operations function to support overall business objectives.

Question 2

Name six types of operational objectives.

Answer 2

Costs, quality, speed of response, flexibility, environmental objectives, added value.

Question 3

What is the value of setting operational objectives?

Answer 3

They improve focus, measure performance, align operations with strategy, and motivate employees.

Question 4

What does ‘added value’ mean in operational terms?

Answer 4

Enhancing a product or service so that the final output is worth more to the customer than the cost of inputs

Question 6

Define the term ‘operational objectives’.

Answer 6

Operational objectives are specific, measurable targets set for the production function of a business to support its overall aims, such as improving efficiency, quality, or flexibility.

Question 7

Analyse the possible benefits to a business of setting environmental operational objectives.

Answer 7

• Improves brand image and attracts environmentally conscious consumers.
• Leads to cost savings through reduced waste and efficient resource use.
• Helps comply with regulations, reducing risk of fines.

Question 8

‘Reducing operational costs is the most important operational objective for a business.’ To what extent do you agree?

Answer 8

• For: Lower costs increase profit margins and competitiveness.
• Against: Over-focusing may reduce quality or flexibility.
• Conclusion: Depends on strategy — quality or speed may matter more in some cases.

Question 9

Outline two reasons why a business may set operational objectives.

Answer 9

1. To improve efficiency and reduce costs.
2. To increase customer satisfaction by improving quality or delivery speed.

Question 10

Identify and briefly explain two examples of operational objectives.

Answer 10

1. Quality improvement: Aiming to reduce defect rates.
2. Speed of response: Reducing delivery times to meet expectations.

Question 11

A UK furniture manufacturer sets a new objective to improve its speed of response. Explain one benefit this could bring to the business.

Answer 11

Faster response times can increase customer satisfaction, leading to repeat business and positive word-of-mouth, boosting revenue and market share.

Question 12

A business wants to improve flexibility in its operations. Explain how this might affect its workforce and production processes.

Answer 12

Workforce may require multi-skilling and training. Production may shift to adaptable methods like cell production or just-in-time systems.

Question 13

Analyse how setting operational objectives related to quality can help a business gain competitive advantage.

Answer 13

• Reduces defects and costs.
• Enhances reputation and customer loyalty.
• Enables premium pricing and product differentiation.

Question 14

Analyse how reducing operational costs could support a business’s overall corporate objectives.

Answer 14

• Increases profit margins.
• Enables reinvestment in growth or innovation.
• Supports pricing strategies to gain market share.

Question 15

Analyse how focusing on added value in operations can improve business performance.

Answer 15

• Allows premium pricing.
• Builds stronger brand loyalty.
• Improves profit margins and reinvestment opportunities.