3.4.
1 Setting operational objectives
Content Additional information
The value of setting operational objectives Operational objectives include:
costs
quality
speed of response
flexibility
environmental objectives
added value.
3.4.2 Analysing operational performance
Content Additional information
The interpretation, calculation and use of Students should be able to calculate:
operations data in operational decision labour productivity
making and planning unit costs (average costs)
capacity
capacity utilisation.
3.4.3 Making operational decisions to improve performance: increasing efficiency and
productivity
Content Additional information
The importance of capacity The importance of capacity should include how to utilise
capacity efficiently.
The importance of efficiency and The importance of efficiency and labour should include:
labour productivity how to increase efficiency and labour productivity
difficulties increasing efficiency and labour productivity.
The benefits and difficulties of Lean production should include 'Just in Time' operations vs 'Just
lean production in Case'.
How to choose the optimal mix The mix of resources should include an understanding of labour
of resources and capital intensive processes.
How to use technology to
improve operational efficiency
3.4.4 Making operational decisions to improve performance: improving quality
Content Additional information
Methods of improving quality Methods of improving quality should include quality
assurance vs quality control.
The benefits and difficulties of
improving quality
The consequences of poor quality
3.4.5 Making operational decisions to improve performance: managing inventory and
supply chains
Content Additional information
How to manage supply to match demand and Ways of matching supply to demand include:
the value of doing so outsourcing
use of temporary and part time employees
producing to order.
Influences on the amount of inventory held Inventory control should include:
interpreting inventory control charts
lead time
re-order levels
buffer level of inventory
re-order quantities.
Influences on the choice of suppliers
How to manage the supply chain effectively
and efficiently and the value of this
The value of outsourcing
3.5.1 Setting financial objectives
Content Additional information
The value of setting financial objectives Financial objectives to include:
the concept of a return on investment
revenue, costs and profit objectives
cash flow objectives.
The distinction between cash flow and profit
The distinction between gross profit, operating
profit and profit for the year
3.5.2 Analysing financial performance
Content Additional information
How to construct and analyse budgets Analysing budgets should include variance analysis and
and cash flow forecasts adverse and favourable variances.
The value of budgeting
How to construct and interpret break- Break-even analysis should include:
even charts break-even output
margin of safety
contribution per unit
total contribution.
How to calculate and illustrate on a
break-even chart the effects of
changes in price, output and cost
The value of break-even analysis
How to analyse profitability Analysing profitability margins should include the following
ratio analysis:
gross profit
profit from operations
profit for the year.
How to analyse timings of cash Analysing timings of cash flow should include an
inflows and outflows understanding of payables and receivables.
The use of data for financial decision
making and planning
3.5.3 Making financial decisions: sources of finance
Content Additional information
Internal and external sources of finance Sources of finance should include:
debt factoring
overdrafts
retained profits
share capital
loans
venture capital
crowd funding.
Advantages and disadvantages of different sources of
finance for short- and long-term uses
3.5.4 Making financial decisions: improving cash flow and profits
Content Additional information
Methods of improving cash flow Students should be able to assess ways of improving cash
flow.
Methods of improving profits and Students should be able to assess ways of improving
profitability profits and profitability.
Difficulties improving cash flow and profit
3.6.1 Setting human resource objectives
Content Additional information
The value of setting human resource Human resource objectives include:
objectives employee engagement
talent development
training
diversity
alignment of employee and employer values
number, skills and location of employees.
Methods of achieving human resource Methods should include soft and hard human resource
objectives management (HRM) approaches.
3.6.2 Analysing human resource performance
Content Additional information
Calculating and interpreting human resource Students should be able to calculate and interpret:
data labour turnover
labour productivity
employee costs as percentage of turnover
labour cost per unit.
The use of data for human resource decision
making and planning
3.6.3 Making human resource decisions: improving organisational design and managing
the human resource flow
Content Additional information
Models of organisational structure Organisational structures to include:
functional
product-based
regional
matrix structure.
Influences on organisational design Decisions relating to organisational design include:
authority
span
hierarchy
delegation
centralisation and decentralisation.
The value of changing organisational design
How managing the human resource flow Human resource flow to include:
helps meet human resource objectives human resource plan
recruitment
training
redeployment
redundancy.
3.6.4 Making human resource decisions: improving motivation and engagement
Content Additional information
The benefits of motivated and engaged Theories of motivation should include Taylor,
employees Maslow and Herzberg.
How to improve employee engagement and Financial methods of motivation should include:
motivation piece rate
commission
salary schemes
performance-related pay.
Non-financial methods of motivation should include:
empowerment
team working
flexible working
job enrichment
job rotation.
Influences on the choice and assessment of the
effectiveness of financial and non-financial
methods of motivating employees
3.6.5 Making human resource decisions: improving employer-employee relations
Content Additional information
Influences on the extent and methods of employee Employee representation methods to include
involvement in decision making trade unions and works councils.
How to manage and improve employer-employee
communications and relations
Value of good employer-employee relations