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Operational Objectives - Coggle Diagram
Operational Objectives
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Transformation process
-describes what happens inside a business where value is added to inputs to create outputs
-INPUTS -> TRANSFORMATION PROCESS -> OUTPUTS
Cost and volume
- ensure operations are cost effective (unit costs=total cost / total units)
- business in same industry have similar cost structures, vary in:
- sale of production
- businesses with low unit costs are in strong position because are:
- able to offer lower price
- make highest profit margin
Examples
- productivity and efficiency
- units per item
- contribution per unit
- number of items to produce (per time period/machine etc)
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Quality objectives
- Scrap/defect rates: measure of poor quality
- Reliability: how often something goes wrong ; average lifetime use ets
- Customer satisfaction: measured by customer research - Number of complaints
- Customer loyalty: eg % of repeat business
- % of on time delivery
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Environmental
- Business face more stringent environmental legislation
- Customers increasingly base their buying decisions on firms that take environmental responsibility seriously
Examples
- Use of energy efficiency
- Proportion of production / packaging materials that are recycled - Compliance with waste disposal regulations / proportion of waste to landfill
- Supplies of raw materials from sustainable sources