Methods of production - EduqasThe purpose of business operations
Businesses compete with rival businesses. Production costs must be kept low so that products can be priced competitively. The ability to do this is affected by production methods and technology.
The term business operations refers to the part of the business that provides customers with the goodA product that can be touched. or serviceSomething a business provides that is intangible, ie not able to be touched. that they ordered.
Operations is responsible for taking resources – such as raw materialBasic material that goods are made from such as crops, metals, wood and animal products such as wool and leather., finance and the business’ workforceThe workers employed. – and using them to create finished goods or services. Operations then ensures that these goods or services arrive on time and to the right quality standards.
There are slight differences in how operations are defined in relation to goods and services:
Goods – When products are produced in a factory, everything that happens within the factory, from making goods to delivering goods, is classed as operations.
Services – When a business provides a service, the processes it uses are known as operations. For example, a dairy company that delivers milk to customers’ homes could have a website or app that customers use to order their milk. The company could also have some form of quality controlQuality control involves inspectors checking finished products. to ensure customers are happy with the service they receive.
