Operations management IGCSE Business Studies

Operations management is the forth topic that we will cover in IGCSE Business Studies subject. Watch each lesson and take the test to ensure you have fully understood each topic. This will help you get good marks in your upcoming exam.

4.1 Production of goods and services

4.1.1 The meaning of production:

• Managing resources effectively to produce goods and services
• Difference between production and productivity
• Benefits of increasing efficiency and how to increase it, e.g. increasing productivity by automation and technology, improved labour skills
• Why businesses hold inventories
• The concept of lean production: how to achieve it, e.g. just-in-time inventory control and Kaizen; benefits of lean production

4.1.2 The main methods of production:

• Features, benefits and limitations of job, batch and flow production
• Recommend and justify an appropriate production method for a given situation

4.1.3 How technology has changed and is changing production methods, e.g. using computers in design and manufacturing

4.2 Costs, scale of production and break-even analysis

4.2.1 Identify and classify costs:

• Classifying costs using examples, e.g. fixed, variable, average, total
• Use cost data to help make simple cost-based decisions, e.g. to stop production or continue

4.2.2 Economies and diseconomies of scale:

• The concept of economies of scale with examples, e.g. purchasing, marketing, financial, managerial, technical
• The concept of diseconomies of scale with examples, e.g. poor communication, lack of commitment from employees, weak coordination

4.2.3 Break-even analysis:

• The concept of break-even
• Construct, complete or amend a simple break-even chart
• Interpret a given chart and use it to analyse a situation
• Calculate break-even output from given data
• Define, calculate and interpret the margin of safety
• Use break-even analysis to help make simple decisions, e.g. impact of higher price
• Understand the limitations of break-even analysis

4.3 Achieving quality production

4.3.1 Why quality is important and how quality production might be achieved:

• What quality means and why it is important for all businesses
• The concept of quality control and how businesses implement quality control
• The concept of quality assurance and how this can be implemented

4.4 Location decisions

4.4.1 The main factors influencing the location and relocation decisions of a business:

• Factors relevant to the location decision of manufacturing businesses and service businesses
• Factors that a business could consider when deciding which country to locate operations in
• The role of legal controls on location decisions
• Recommend and justify an appropriate location for a business in given circumstances