Operational Management

What Operational Management covers

Operational management can be examined on any of the three papers. It covers the objectives operations are set, the measures used to judge them, and the decisions taken to improve efficiency, quality and the supply chain.

The 17 subtopics

Each one has its own page. AQA AS Business students sit this topic in the first year.

• Operational objectives: cost and qualityWhat operational objectives are for, and the forms a cost or quality objective can take.Open →
• Speed, flexibility and environmental objectivesSpeed of response, flexibility and environmental objectives, and what each targets.Open →
• Added value and the trade-offs between objectivesHow added value is created, and the trade-offs between cost, quality, speed and flexibility.Open →
• Labour productivity and unit costsCalculating both, and what each says about how well operations are running.Open →
• Capacity and capacity utilisationCalculating utilisation, and why high and low utilisation each affect unit costs.Open →
• Improving capacity utilisationRaising demand, subcontracting and rationalisation, and the problems of running above normal capacity.Open →
• Raising labour productivity, and the obstaclesTraining, capital investment, motivation and reorganisation, and why each takes time or meets resistance.Open →
• Lean production and Just in TimeLean production and JIT against Just in Case, the benefits, and what JIT demands of suppliers.Open →
• Labour-intensive and capital-intensive productionWhat decides between them, and finding the optimal mix of labour and capital.Open →
• Technology in operationsAutomation, robotics, CAD, CAM and ERP, and the cost, training and obsolescence they bring.Open →
• Quality control and quality assuranceThe difference between checking output and building quality in, and who is responsible for each.Open →
• The benefits and costs of improving qualityWhat better quality earns a business, what it costs, and what poor quality costs instead.Open →
• Matching supply to demandProducing to order, outsourcing and flexible contracts, and the cost of holding too much or too little stock.Open →
• The inventory control chartReading maximum and minimum stock levels, buffer stock, lead time, re-order level and re-order quantity.Open →
• Influences on inventory and choosing a supplierDemand variability, lead time, storage and perishability, and the criteria for choosing a supplier.Open →
• Supply chain managementWhat coordinating a supply chain involves, and what effective management delivers.Open →
• Outsourcing: benefits and drawbacksAccess to expertise and lower fixed costs, against dependency, quality risk and confidentiality.Open →

What you need to know

Answer each one before you reveal it.

Take Operational Management further

The same content, four other ways.

Commonly confused

Pairs that lose marks when they are blurred together.

• Job production vs Batch production

  Job production: producing one customised item at a time. Batch production: producing a specified quantity of identical items together.

• Quality control vs Quality assurance

  Quality control: inspection to detect defects in output. Quality assurance: systems that prevent defects throughout production.

• Capacity utilisation vs Productivity

  Capacity utilisation: share of maximum potential output currently produced. Productivity: output produced per unit of input.

Questions from this topic

Each one with the model answer underneath.

1. 1

   What are operational objectives?

   Model answer

   Specific, measurable targets set for the operations function of a business to guide day-to-day activities and support overall corporate aims.

2. 2

   How do operational objectives provide direction for the operations department?

   Model answer

   They enable managers and employees to understand priorities, giving clear focus to day-to-day activities.

3. 3

   Why do operational objectives allow performance measurement?

   Model answer

   They establish benchmarks against which actual outcomes can be compared, enabling assessment of whether targets have been met.

4. 4

   How do operational objectives facilitate coordination between functional areas?

   Model answer

   They clarify what operations must deliver to support marketing, finance and human resources, ensuring all departments work towards compatible goals.

5. 5

   In what way do operational objectives motivate staff?

   Model answer

   By providing clear targets and enabling recognition of achievement when those targets are met.

6. 6

   How do operational objectives support strategic decision-making?

   Model answer

   They translate corporate goals into actionable operational targets, linking day-to-day activities to the overall business strategy.

What is inside Levo

Six ways to work the same material.

Operational Management revision questions

Is Operational Management examined at AS in AQA Business?

Yes. It sits in Papers 1, 2 and 3, which you take in the first year, so it is on the AS paper as well as counting towards the full A level.

What does Operational Management cover in AQA AS-Level Business?

17 subtopics: operational objectives: cost and quality, speed, flexibility and environmental objectives, added value and the trade-offs between objectives, labour productivity and unit costs, capacity and capacity utilisation, improving capacity utilisation, raising labour productivity, and the obstacles, lean production and just in time, labour-intensive and capital-intensive production, technology in operations, quality control and quality assurance, the benefits and costs of improving quality, matching supply to demand, the inventory control chart, influences on inventory and choosing a supplier, supply chain management and outsourcing: benefits and drawbacks. Each one has its own page with questions and model answers.

How is Operational Management organised?

By the AQA 7132 specification, subtopic by subtopic, so it matches the order you are taught it in.