Operations management

Text 1

_{Adapted from www.drmartensplc.com/sustainability/ and www.drmartensplc.com/sustainability/product/. Item removed due to third party copyright restrictions.}Dr Martens plc

In 2023 DM’s accounts showed the data below.

Fig. 1 Selected financial data for Dr Martens plc 2023

State two production processes.

State two reasons why a business may aim to be environmentally friendly.

Calculate DM’s net profit margin for 2023 to two decimal places.

Show your workings.

........ %

Analyse one reason for DM of using the financial data in Fig. 1 to make decisions about how to meet its sustainability objectives.

Explain one way climate change may affect a business.

Analyse one disadvantage for DM of changing the supply chain for leather to meet its sustainability objectives.

Analyse one advantage for DM of changing its packaging to meet its sustainability objectives.

Recommend which of the two sustainability objectives (the supply of leather or the change in packaging) DM should prioritise.

Text 1

Unilever plc

Unilever plc is a multinational company that makes and sells a wide range of quality products including food, cleaning agents and beauty products across 190 countries.

Unilever plc has benefitted from operating in a global marketplace and the majority of its products are international brands. Some of its branded products include Lynx Body Spray, Dove Soap, Hellmann’s Mayonnaise, Ben & Jerry’s ice cream and Persil washing machine detergent. All of these products are made in factories all around the globe, some using flow production and others using batch production.

Unilever plc’s average revenue has grown over the last five years. However, the economic climate is becoming more difficult and Unilever plc’s directors are having to adapt to these challenges.

Fig. 1 Unilever plc worldwide revenue from 2018 to 2022

Identify two characteristics of flow production.

Analyse one way the marketing function impacts on the operations function of Unilever plc.

Calculate Unilever plc’s average revenue from 2019 to 2022.

Explain one way revenue affects a business’ decision making.

Explain how operating in a difficult economic climate might affect a business.

State what is meant by international branding.

Evaluate the benefits of international branding to Unilever plc.

Text 1 Zara

Zara is a global fashion brand based in Spain. Zara is best known for the speed and frequency it can get its new clothing ranges into its online shop and 2270 stores. Approximately 50% of Zara’s clothes are manufactured in Spain; the rest come from other European countries, or from Asia and Africa. Like most firms in 2020, Zara experienced a fall in sales. Zara’s global sales revenues in 2019 were €19 954 million, but in 2020 these fell to €14 129 million. However, during this period Zara’s online sales increased by approximately 75%, as consumer buying habits changed in favour of e-commerce.

Zara can get new clothing designed, manufactured and delivered to its stores within 15 days. It does this by buying fabric in large quantities from suppliers in Europe, which helps keep its variable costs low. This means that it is delivered quickly to its factory in Spain, where it can then be made up into the new designs.

Zara’s highly responsive supply chain is central to its business success. This means it can change its clothing designs on average every two weeks, while competitors change their designs every two or three months.

Explain one production process a business may use when making its products.

Explain one method that a business could use to ensure the quality of its products.

Analyse one reason why keeping variable costs low may reward Zara’s owners.

Calculate the percentage decrease in Zara’s sales revenue between 2019 and 2020.

Show your workings

Answer........

Explain one possible advantage to a business of selling its products via e-commerce.

Identify two roles of the procurement function in a business.

Evaluate the importance to Zara of having reliable suppliers in the supply chain for its clothing.

Identify one economic factor which may affect a company’s profit.

Analyse the importance of quality in the production of the houses that BD plc produces.

Analyse one advantage to BD plc of obtaining 90% of its raw materials from the UK.

Analyse one advantage and one disadvantage to BD plc of producing components in batches at its factory.

Recommend whether BD plc should continue to produce components in batches at its factory.

* Evaluate how useful break-even analysis is to BD plc’s pricing and promotional decisions.

Text 3 Pukka Pies Ltd

Pukka Pies Ltd is a family-owned business with approximately 360 employees. It makes a range of high-quality savoury pies, including steak, chicken and mushroom, and chicken balti, in batches at its factory in Leicester, England. Pukka Pies are sold in more than 4000 food stores nationwide as well as in sports stadiums, fish and chip shops and cafés across the country.

Three of Pukka Pies Ltd’s key values are recruiting people who are ambitious, delighting customers with quality pies, and building trust with suppliers through food safety. Each of these values helps the business meet the requirements of consumer law.

The success of Pukka Pies Ltd is affected by many factors, including its logistical and supply chain decisions. Pukka Pies Ltd procures the ingredients for its pies from businesses across the UK and overseas; consequently its supply chain is long. Nevertheless, all of these ingredients need to arrive in good condition and, therefore, its logistics are time-critical. Unemployment levels also have a significant impact on Pukka Pies Ltd.

Pukka Pies Ltd considers its environmental impact across all aspects of business activity. It has already replaced some of the non-recyclable plastics used in its packaging with alternatives that can be recycled. In addition, none of the company’s waste goes to landfill.

Identify one way consumer law protects consumers.

Analyse the benefits to Pukka Pies Ltd of using a batch production process.

Analyse one way falling unemployment might influence recruitment at Pukka Pies Ltd.

Analyse the impact of each of the following on Pukka Pies Ltd:

the length of its supply chain........

the time-critical nature of its logistics........

Recommend whether the length of its supply chain or the time critical nature of its logistics has the greater impact on Pukka Pies Ltd’s success.

* Evaluate how Pukka Pies Ltd’s environmental considerations might influence its marketing

mix.