Role of Operations and Influences on Operations
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Questions and Answers

What is the strategic role of operations management in achieving competitive advantage?

  • Minimizing expenses to maximize profits (correct)
  • Balancing expenses and profits for sustainable growth
  • Maximizing expenses to minimize costs
  • Focusing solely on increasing production deadlines

    • How is sustainable competitive advantage achieved in operations management?

  • By providing customers with the best value for a relatively low price (correct)
  • By diversifying product features to attract different customer segments
  • By increasing costs to enhance product quality
  • By focusing solely on maximizing profits at any cost

    • What is the primary benefit of economies of scale in business operations?

  • Reduced negotiation power with suppliers
  • Increased product quality and exclusivity
  • Decreased production efficiency
  • Cost advantages and better rates with suppliers (correct)

    • Which factor can affect the differentiation of services?

    <p>The use of high-quality materials and technology in service delivery</p> Signup and view all the answers

    What is the strategic role of operations management in differentiation strategies?

    <p>Determining the service mix to meet customer requirements</p> Signup and view all the answers

    What does the tertiary sector include?

    <p>Businesses that perform services for other people</p> Signup and view all the answers

    Corporate social responsibility only focuses on complying with laws and regulations

    <p>False</p> Signup and view all the answers

    Ethical responsibility goes beyond legal compliance by following the intention and 'spirit' of the law

    <p>True</p> Signup and view all the answers

    Businesses are not impacted by government policies in their operations management

    <p>False</p> Signup and view all the answers

    Environmental sustainability means using natural resources without considering future generations' access to resources

    <p>False</p> Signup and view all the answers

    Ethical responsibility goes beyond ______ by following the intention and 'spirit' of law

    <p>legal compliance</p> Signup and view all the answers

    Match the following government policies with their impact on operations management:

    <p>Occupational Health &amp; Safety (OH&amp;S) standards = Significantly impact operations Environmental regulations = Affect operations in terms of sustainability and resource management Employment relations policies = Influence workforce management and labor costs Trade industry policies = Impact international business activities and trade relationships</p> Signup and view all the answers

    Match the following statements with their impact on business operations:

    <p>Recycling water and reducing carbon footprint = Integration of long-term sustainable view into business planning/practice Relocating production overseas = Easier and cheaper supply of raw materials Technology as a driver of globalization = Encouraged and facilitated global expansion Supply chain management based on cost-leadership principles = Enables sourcing products in global market and achieving cost leadership</p> Signup and view all the answers

    Match the following environmental sustainability initiatives with their impact on business operations:

    <p>Carbon Trading Scheme = Forces businesses to pay for every tonne of carbon pollution they emit Reducing, reusing, and recycling natural resources = Allows businesses to implement environmentally friendly practices Government initiatives to reduce impact of development = Aim to reduce environmental impact and promote sustainable resource management Using natural resources in a manner that will not compromise future generations' access to resources = Requires businesses to consider their role in sustaining high standards of living for future generations</p> Signup and view all the answers

    What is the primary focus of corporate social responsibility in a large business?

    <p>Doing right by the organization’s stakeholders beyond legal compliance</p> Signup and view all the answers

    Which of the following government policies significantly impacts operations management?

    <p>Civil Aviation Authority regulations</p> Signup and view all the answers

    How can businesses demonstrate ethical responsibility and corporate social responsibility in their operations?

    <p>By extending the way products are manufactured, marketed, priced, and distributed</p> Signup and view all the answers

    What is the strategic role of operations management in differentiation strategies?

    <p>Maximizing product distinctiveness</p> Signup and view all the answers

    What distinguishes ethical responsibility from legal compliance in business operations?

    <p>Ethical responsibility involves following the intention and 'spirit' of the law, whereas legal compliance only requires meeting all applicable laws and regulations.</p> Signup and view all the answers

    How can businesses demonstrate ethical responsibility and corporate social responsibility in their operations?

    <p>By implementing environmentally friendly practices, providing support to the community, and adhering to legal regulations.</p> Signup and view all the answers

    What is the strategic role of operations management in achieving competitive advantage?

    <p>Operations management aims to differentiate products or services, reduce costs, and provide unique value to customers.</p> Signup and view all the answers

    Corporate social responsibility only focuses on complying with laws and regulations

    <p>False</p> Signup and view all the answers

    Ethical responsibility goes beyond legal compliance by following the intention and 'spirit' of the law

    <p>True</p> Signup and view all the answers

    What is the main focus of a cost leadership strategy in operations management?

    <p>Minimizing costs to become the lowest cost manufacturer</p> Signup and view all the answers

    What are the primary strategic goals of operations management?

    <p>Improving productivity, efficiency, and quality of outputs</p> Signup and view all the answers

    What does a business aim to achieve through product differentiation in operations management?

    <p>Produce goods or services that are different and competitive against rivals</p> Signup and view all the answers

    What is a potential issue in cost leadership strategy?

    <p>Competitors using the same strategy</p> Signup and view all the answers

    Which company is cited as an example of achieving cost leadership?

    <p>IKEA</p> Signup and view all the answers

    What is an example of product differentiation mentioned in the text?

    <p>Leather seats for motor vehicles</p> Signup and view all the answers

    Which of the following is a cost reduction strategy for businesses?

    <p>Outsourcing</p> Signup and view all the answers

    What is an example of a government policy impacting business operations?

    <p>Regulation</p> Signup and view all the answers

    What is an example of a successful environmental sustainability initiative by a business?

    <p>Adidas creating shoes from ocean plastic waste</p> Signup and view all the answers

    What is the purpose of derivatives in global business operations?

    <p>To manage risks associated with currency fluctuations</p> Signup and view all the answers

    What do bilateral trade agreements involve?

    <p>Reducing trade barriers between two countries</p> Signup and view all the answers

    How does technology drive globalization in business operations?

    <p>By enhancing productivity, reducing costs, and improving quality</p> Signup and view all the answers

    What distinguishes manufacturing outputs from services outputs?

    <p>Manufacturing outputs are physical and tangible, while services outputs are intangible</p> Signup and view all the answers

    What is the primary purpose of globalization for businesses?

    <p>To reduce costs through establishing a global supply chain and access a global market</p> Signup and view all the answers

    What distinguishes manufacturing outputs from services outputs?

    <p>Manufacturing outputs are physical and tangible, while services outputs are intangible and labor-intensive</p> Signup and view all the answers

    What is a key impact of globalization on business operations?

    <p>Increased opportunities for cost reduction and access to new markets</p> Signup and view all the answers

    What is the role of supply chain management in the context of the global web of operations?

    <p>Involves sourcing from a network of global suppliers and managing currency risks through hedging</p> Signup and view all the answers

    What are the quality expectations related to goods?

    <p>Quality of design, fitness for purpose, durability</p> Signup and view all the answers

    Which quality management approach involves continuous improvement?

    <p>Total Quality Management (TQM)</p> Signup and view all the answers

    What is a potential method to achieve cost advantage in cost-based competition?

    <p>Outsourcing operations to reduce costs</p> Signup and view all the answers

    How can a business reduce operational costs to gain a price advantage in cost-based competition?

    <p>Updating technology to improve efficiency</p> Signup and view all the answers

    What is a strategy to gain a price advantage in cost-based competition?

    <p>Reducing quality to lower costs</p> Signup and view all the answers

    What is a key quality expectation related to services?

    <p>Customisation level</p> Signup and view all the answers

    Which factor contributes to the reliability of a service provider?

    <p>Consistency of service delivery</p> Signup and view all the answers

    What is a characteristic of the professionalism of a service provider?

    <p>Ethical conduct</p> Signup and view all the answers

    Study Notes

    Operations Management and Differentiation Strategies in Goods and Services

    • Augmented features in goods refer to add-ons or additional benefits, such as a car manufacturer allowing for the capacity to fit a spoiler or GPS.
    • Operations management plays a strategic role in determining differentiation strategies while maintaining cost leadership.
    • Differentiation in services can be achieved through varying the amount of time spent, level of expertise, and qualifications/experience of service providers.
    • The use of high-quality materials and technology in service delivery can affect the differentiation of services.
    • Operations management decides on the service mix to ensure customer requirements are met while maintaining a focus on cost leadership.
    • Differentiation in both goods and services can be created through cross-branding or strategic alliances.
    • Industries in the primary sector involve businesses directly associated with natural resources such as mining, fishing, and forestry.
    • The secondary sector involves taking raw materials and processing them into finished or semi-finished products.
    • The tertiary sector includes businesses that perform services for other people, while the quaternary sector involves services that involve the transfer and processing of information and knowledge.
    • Operations management is responsible for obtaining resources, supply chain management, quality of outputs, and meeting deadlines, and is interdependent with other key business functions such as finance, marketing, and human resources.
    • Influences on operations management include globalization, technology, quality expectations, cost-based competition, government policies, legal regulations, and environmental sustainability.
    • Globalization significantly affects operations management in terms of supply chain management, with opportunities to enter the global market and achieve cost leadership principles, but also the need to relocate production overseas for cost advantages.

    Global Business Operations: Key Concepts and Strategies

    • Transaction exposure is used by global businesses to mitigate risks associated with currency appreciation and depreciation through contracts to buy and sell foreign exchange for purchasing inputs from other countries.
    • Subsidiaries are businesses owned by global corporations that supply inputs, and hedging uses subsidiaries to ensure all transactions are in the same currency.
    • Derivatives, special contracts between global businesses, are used to manage risks associated with currency fluctuations.
    • Bilateral trade agreements involve two countries reducing trade barriers, while multilateral trade agreements involve multiple nations.
    • Regionalism involves the classification of the world's regions based on geography and economic links, leading to the formation of economic alliances such as NAFTA and ASEAN.
    • Trading blocs, formed through multilateral trade agreements, reduce restrictions and facilitate trade among member countries.
    • Globalization enables higher incomes and a growing middle class, leading to increased demand for differentiated products tailored to local cultures.
    • Market research is crucial for understanding local language, religion, and ethics to adapt products to different cultural preferences.
    • Utilizing local experts can help global businesses navigate cultural differences and communication challenges.
    • Technology drives globalization, and businesses must adapt to technological advances to remain competitive.
    • Robotics, CAD, and CAM technologies enhance productivity, reduce costs, and improve quality in manufacturing and design processes.
    • Quality expectations, both in goods and services, are crucial for operations functions and customer satisfaction, requiring businesses to source better quality inputs and maximize transformation processes.

    Operations Management and Globalization in Business

    • Non-perishable goods require quality management throughout sourcing, production, and distribution
    • Operations processes vary for standardized and customized goods and services
    • Manufacturing outputs are physical, tangible, and capital-intensive, while services outputs are intangible and labor-intensive
    • Kmart's retail operations focus on providing a high-quality shopping experience and customer service
    • Ford Motor Company's operations rely on high-quality components and after-sales service to meet customer expectations
    • Interdependence and specialization are key aspects of business operations
    • Operations and finance rely on each other for funds, resource allocation, and profitability
    • Operations and marketing are interdependent, with operations supplying products based on consumer demand
    • Human resources ensure the availability of skilled employees to meet operations requirements
    • Globalization impacts business operations through opportunities for cost reduction and access to new markets
    • The global web of operations drives cost reduction and competitive advantage through outsourcing and access to global labor markets
    • Supply chain management and the global web involve sourcing from a network of global suppliers and managing currency risks through hedging.

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    Description

    Test your knowledge of operations management and differentiation strategies in goods and services with this quiz. Explore the role of operations management in determining differentiation strategies, the impact of globalization on supply chain management, and the various sectors of the economy. Brush up on key concepts related to augmented features, service differentiation, and industry influences.

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