Making Operational Decisions

What Making Operational Decisions covers

Making Operational Decisions is examined in Paper 2, Building a business (Theme 2). It covers business operations and production processes, working with suppliers, managing quality and the sales process.

The 4 subtopics

Each one has its own page.

• Business operations and production processesJob, batch and flow production with their advantages and disadvantages, labour productivity, how production choices affect price, and the benefits and costs of new production technology.Open →
• Working with suppliersBar gate stock graphs, buffer stock, reorder levels, lead times and reorder quantities with worked examples, just in time stock control, procurement and logistics.Open →
• Managing qualityQuality control and quality assurance, managing quality in services, how quality affects costs and competitive advantage, ISO 9001, and using customer complaints to improve.Open →
• The sales processProduct knowledge, speed and efficiency of service, customer engagement and feedback, post-sales service, and why good customer service builds loyalty, especially for small shops.Open →

What you need to know

Answer each one before you reveal it.

Take Making Operational Decisions 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: making a single unique item to one customer's order. Batch production: making a set quantity of identical items before switching to another.

• Quality control vs Quality assurance

  Quality control: inspecting finished items at the end to find faults. Quality assurance: building checks into every stage so faults are prevented.

• Just in time vs Buffer stock

  Just in time: ordering materials to arrive exactly when needed so almost none is held. Buffer stock: the minimum reserve kept to cover late deliveries or sudden demand.

Questions from this topic

Each one with the model answer underneath.

1. 1

   What is the purpose of business operations?

   Model answer

   Business operations turn inputs such as materials and labour into goods or services. Operations aim to meet customer needs efficiently.

2. 2

   What is the difference between producing goods and providing services?

   Model answer

   Goods are physical products that can be stored, such as cars. Services are intangible actions performed for customers, such as haircuts.

3. 3

   What is job production?

   Model answer

   Job production is making a single, unique product to a customer's own order. Wedding cakes and made-to-measure suits are made this way.

4. 4

   What are the advantages and disadvantages of job production?

   Model answer

   Job production gives high quality and exactly what the customer wants, so a high price can be charged. Unit costs are high because the work is skilled and slow.

5. 5

   What is batch production?

   Model answer

   Batch production is making a set number of identical products before switching to a different batch. A bakery might bake 200 white loaves, then 200 brown.

6. 6

   What are the advantages and disadvantages of batch production?

   Model answer

   Batch production offers some variety while keeping unit costs below those of job production. Machines stand idle while they are reset between batches.

What is inside Levo

Six ways to work the same material.

Making Operational Decisions revision questions

What does Making Operational Decisions cover in Edexcel GCSE Business?

4 subtopics: business operations and production processes, working with suppliers, managing quality and the sales process. Each one has its own page with questions and model answers.

How is Making Operational Decisions organised?

By the Edexcel 1BS0 specification, subtopic by subtopic, so it matches the order you are taught it in.