Operations Management

Revise Operations Management for Business 9609 (AS Level) — revision notes and instant AI marking.

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Cambridge International AS & A Level Business (9609)

Operations Management

The big idea: Operations turn inputs into outputs; the goal is to add value efficiently, sustainably and at the right capacity.

Summary — What This Chapter Covers

Efficiency, effectiveness, productivity and sustainability.
Capital-intensive vs labour-intensive production; job, batch, flow and mass customisation.
Inventory: buffer stock, re-order level, lead time, JIT vs JIC.
Capacity utilisation and outsourcing.

1. The Nature of Operations

Operations

Methods of production

Labour productivity = output ÷ number of workers. Job production makes one-off items; batch makes groups; flow makes continuous standardised output.

Practice Question

Define the term job production.

2. Inventory Management

Inventory

JIT and JIC

JIT cuts storage costs and waste but needs reliable suppliers; JIC holds buffer stock to avoid running out but ties up working capital.

3. Capacity Utilisation and Outsourcing

Capacity

Using what you have

Capacity utilisation = (actual output ÷ maximum possible output) × 100. High utilisation spreads fixed costs; very high utilisation leaves no slack. Outsourcing can cut costs but reduces control.

Worked Example

Memorise

Productivity

Output ÷ workers

Capacity utilisation

JIT

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Operations Management