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Topic 3: Operations management
Practice school-assessed coursework
Outcome 3
Analyse the relationship between business objectives and operations management,
and propose and evaluate strategies to improve the efficiency and effectiveness of
business operations.
ASSESSMENT task — case study
Time allocated:
65 minutes
Marks allocated:
40 marks (marks are indicated at the end of each question)
Conditions:
Closed book (no notes or textbooks may be used when completing this
task).
Answer all questions in the spaces provided. Use the marking scheme as a guide to the time
you should spend on each question.
SECTION A (26 marks)
1
Explain one reason why a business would need to manage its supply chain.
(2 marks)
2
Describe how a business might use website development as a strategy to improve the
efficiency and effectiveness of its operations.
(4 marks)
3
Kookaburra Airlines is an airline company that operates domestically. The business has
decided to focus on competing on quality to ensure its long-term success.
(a) Distinguish between the operations of a manufacturing and service business.
Suggest the category under which Kookaburra Airlines fits.
(5 marks)
(b) Discuss the use of Total Quality Management and recommend whether or not you
think it would be suitable for Kookaburra Airlines’ operations.
(5 marks)
© John Wiley & Sons Australia, Ltd
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Topic 3: Operations management
4
With reference to the terms ‘forecasting’, ‘master production schedule’ and ‘materials
requirement planning’, explain what materials management is. Evaluate the use of one
of these strategies for improving the operations of a contemporary business that you are
familiar with.
(10 marks)
SECTION B (14 marks)
Use the case study provided to answer the questions in this section. Answers must apply to
the case study.
Yakult
Yakult Australia Pty Ltd commenced production in 1994. In Australia, it manufactures and
sells Yakult Original and Yakult LIGHT, which are fermented milk drinks. Yakult contains
probiotic bacteria known as the Lactobacillus casei Shirota strain, which can help the
digestive system to remain healthy. Yakult’s objective is reflected in its global corporate
philosophy, which is to ‘contribute to the health and happiness of people around the world
through pursuit of excellence in life sciences in general and our research and experience
in microorganisms in particular’.
Yakult’s purpose-built factory and office complex in Dandenong was constructed in 1993.
It cost $30 million. The factory can now produce between 350 000 and 400 000 bottles
daily, supplying Yakult to Australian and New Zealand markets.
Inside the automated factory, raw ingredients (skim milk powder, sugar and dextrose) are
mixed together with filtered water and undergo sterilisation. Live Lactobacillus casei
Shirota strain is added to the milk to begin the fermentation process. Citrus flavour is
added to the mixture. During fermentation, the bacteria rapidly multiply. The mixture is
homogenised, so that it has a smooth consistency and then it is diluted with filtered water
to produce the final product.
Yakult’s unique plastic bottles (they are very small — 65 mL) are created on site and
manufacturing staff monitor the quality of the product to ensure it meets the highest
standards. A filling machine that has the capacity to fill 45 000 bottles per hour fills the
bottles with Yakult. They are then capped with a foil lid, printed with a use-by date, sealed
and transferred along the conveyor belt to the packaging facility. Yakult needs to be stored
and distributed at temperatures below 4°C.
Quality at Yakult
Yakult’s quality management system (QMS) complies with the International Organization
for Standardization’s relevant Standard [ISO 9001:2015]. This means that Yakult meets
the highest international food manufacturing standards. All company procedures are
© John Wiley & Sons Australia, Ltd
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Topic 3: Operations management
documented and are regularly audited. In terms of quality control, individual bottles are
randomly inspected for incorrect printing and lid sealing. Product samples are collected
and assessed for quality, composition and taste in Yakult’s onsite quality control area.
Waste management
Yakult Australia is very much aware of the need to minimise its environmental impact. Its
waste management strategies, such as recycling of paper products and plastic waste,
have resulted in more than 99 per cent of raw ingredients being used. Cleaning waste
goes into a holding tank in the onsite water treatment facility.
1
Define the following terms using examples from the Yakult case study.
a. Automated production line
(2 marks)
b. Waste minimisation
(2 marks)
2
Describe the relationship between Yakult’s business objectives and operations
management.
(2 marks)
3
Outline the inputs used by Yakult.
(2 marks)
4
Identify and describe one way in which Yakult has incorporated corporate social
responsibility considerations into its operations system.
(2 marks)
5
Compare the use of quality control and quality assurance at Yakult.
(4 marks)
© John Wiley & Sons Australia, Ltd
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