Operations Methods (DP IB Business Management: HL): Exam Questions

Tailor Tech is a high-end tailoring business offering bespoke suits for professionals and special occasions. Each suit is crafted to the specific measurements and design preferences of the customer. The company uses job production to ensure a unique product for every client.

Recently, Tailor Tech introduced an online customisation platform allowing customers to choose fabrics, styles, and details like buttons and lapels. While this approach enhances customer satisfaction, it also presents challenges, such as longer lead times and higher costs compared to mass production methods.

Tailor Tech is a high-end tailoring business offering bespoke suits for professionals and special occasions. Each suit is crafted to the specific measurements and design preferences of the customer. The company uses job production to ensure a unique product for every client.

Recently, Tailor Tech introduced an online customisation platform allowing customers to choose fabrics, styles, and details like buttons and lapels. While this approach enhances customer satisfaction, it also presents challenges, such as longer lead times and higher costs compared to mass production methods.

LuxBake is a premium chocolatier specialising in handcrafted chocolates. The company uses batch production to create small quantities of customised products, such as truffles and bonbons, for special occasions and corporate clients.

While batch production allows for variety and quality control, it also presents challenges, such as higher per-unit costs and potential inefficiencies during equipment changeovers. LuxBake is exploring ways to optimise its production process without compromising its focus on artisanal quality.

LuxBake is a premium chocolatier specialising in handcrafted chocolates. The company uses batch production to create small quantities of customised products, such as truffles and bonbons, for special occasions and corporate clients.

While batch production allows for variety and quality control, it also presents challenges, such as higher per-unit costs and potential inefficiencies during equipment changeovers. LuxBake is exploring ways to optimise its production process without compromising its focus on artisanal quality.

RapidBuild manufactures prefabricated construction materials, including wall panels and roof beams, using flow production. This method ensures consistency and high output to meet the demands of large-scale construction projects.

While flow production is efficient, it relies heavily on machinery, which can lead to significant downtime during breakdowns. RapidBuild is exploring preventive maintenance strategies to reduce risks and improve overall productivity.

RapidBuild manufactures prefabricated construction materials, including panels and beams, using flow production. This method ensures consistency and high output to meet the demands of large-scale construction projects.

While flow production is efficient, it relies heavily on machinery, which can lead to significant downtime during breakdowns. RapidBuild is exploring preventive maintenance strategies to reduce risks and improve overall productivity.

EcoMeals Ltd produces pre-packaged organic meals for supermarkets. In a recent production run, the company encountered several challenges, including damaged packaging and incorrect portioning. Management wants to calculate the wastage rate to assess production efficiency and identify areas for improvement.

SpeedyDeliver Ltd is a fast-growing logistics company specialising in last-mile delivery for online retailers. The company’s mission is “to deliver faster, smarter and greener”, reflecting its focus on speed, innovation and sustainability. Operating in three major regions, SpeedyDeliver serves over 200 retail partners and aims to reduce delivery times by 15% within two years while transitioning 50% of its fleet to electric vehicles

SpeedyDeliver is exploring overseas expansion into fast-growing e-commerce markets in Asia and Europe. These markets offer significant opportunities for revenue growth, with projections suggesting an increase of 30% in annual revenue within three years. However, expansion comes with risks, including compliance with local regulations, currency fluctuations and competition from established local firms. The move would require substantial investment in infrastructure and staff recruitment, with initial costs estimated at $10m. Despite these challenges, the board believes that SpeedyDeliver’s commitment to sustainability and innovation could provide a competitive edge

Internally, the company faces growing resistance to change, particularly regarding its use of automation. Employees have protested the introduction of automated sorting systems, as they fear job losses, even though management has pledged to reskill affected workers. Customers, meanwhile, have reported increasing delivery delays, with complaints rising by 20% over the past seven years. These issues highlight the challenges of balancing operational efficiency with stakeholder expectations

Cultural differences are also a concern as the company considers overseas markets. SpeedyDeliver’s leadership recognises the importance of understanding and adapting to local business practices, especially in diverse markets such as Asia. Failure to align its operations with local cultures could hinder its expansion efforts

Effective communication has emerged as a key priority. Formal updates are shared through management emails and company meetings, but informal feedback suggests that many employees feel uninformed about the company’s strategic direction. The board is considering introducing regular town hall meetings and anonymous surveys to improve communication and address employee concerns

To fund its plans, SpeedyDeliver is reviewing investment options, including issuing shares or securing loans. The company must balance its growth ambitions with the need to address existing inefficiencies, maintain employee morale and meet environmental goals

Table 1: SpeedyDeliver financial overview (2023)

Table 2: Stakeholder satisfaction survey (2023)

Graph: Delivery complaints (2016–2023)

AquaPure Water Solutions is a large company based in Europe. It makes eco-friendly water purification systems that help people get clean drinking water. The company operates in more than 30 countries, including fast-growing markets such as India, Nigeria and Brazil. AquaPure’s goal is to provide affordable, clean water solutions while protecting the environment

AquaPure has grown quickly by working with local partners, setting up joint ventures and receiving tax benefits from governments in developing countries. These tax benefits have helped the company lower its costs by 15%. AquaPure uses a batch production system, which helps the company make products efficiently and keep quality high. The company has also created about 10,000 jobs in its operating countries and partnered with charities to bring clean water to over 2m people

Even though AquaPure has been successful, it has some problems. Communities near AquaPure’s factories in Nigeria say that the company uses too much water, which leaves less for farming and household needs. AquaPure has promised to spend $1m each year on projects to save water. In Brazil, local businesses say that they are struggling because AquaPure’s large size makes it hard for smaller companies to compete. This has led to job losses in the area. In India, some people say that AquaPure’s products are too expensive for low-income families. For example, a water purifier from AquaPure can cost $150, which is much higher than the local average of $80. AquaPure says its products last longer and work better, making them good value over time

AquaPure is thinking about new ways to handle these challenges. The company may use outsourcing to make its products cheaper. It is also planning to introduce a tiered pricing system to offer products at different prices for different customer groups

Table 1: Key facts by region

Table 2: Batch production vs outsourcing