IB Diploma Programme Business Management SL, Unit 5 Operations management (first assessment 2024). This topic covers the SL content of syllabus sections 5.1-5.5: the role of operations and the transformation process, operations methods, location, and break-even analysis — lean production and quality management (5.3), production planning (5.6), crisis management and contingency planning (5.7), research and development (5.8) and management information systems (5.9) are HL only and are left out. The worked numbers extend the shared repair business, and they reconcile with Unit 3: price 25 per repair, variable cost 15, fixed costs $12\,500$ a month.

Must-know for Unit 5:

Operations management 运营管理 (5.1) turns INPUTS (labour, parts, premises, information) through a PROCESS into OUTPUTS (goods and services), aiming at EFFICIENCY (output per unit of input — doing things right) and EFFECTIVENESS (meeting the objective — doing the right things). The key measure is productivity 生产率: output over input. LABOUR productivity $=$ repairs $/$ staff: $2\,000$ repairs a month with 80 employees is 25 repairs per employee; productivity rises by more output from the same staff (training, tools, layout) or the same output from fewer.

Operations methods (5.2) choose HOW to produce. JOB production makes one custom item at a time (a racing-bike build) — high value, high skill, high unit cost. BATCH makes groups of identical items then switches (e-bike service visits by district) — flexible between lines, but change costs and idle time between batches. FLOW (mass) production runs one standard product continuously (a puncture-repair line) — lowest unit cost, but inflexible and deskilling. Mass customisation 大规模定制 uses flexible technology to offer choice at near-flow cost — the subscription bike configured online, serviced on a flow line — the modern ideal and the classic evaluative contrast.

Location (5.4) weighs QUANTITATIVE factors (site cost, labour cost, grants, transport costs — a weighted-score or break-even table can rank sites) against QUALITATIVE ones (image, labour skills, infrastructure, proximity to customers and suppliers, regulation, environmental limits). For a service like repairs, CUSTOMER PROXIMITY dominates; for parts storage, cost and access dominate — the fourth workshop sits by the station, the parts depot by the ring road.

Break-even analysis 盈亏平衡分析 finds the output where total revenue equals total cost. CONTRIBUTION per unit $=$ price $-$ variable cost $= 25 - 15 = 10$ — each repair contributes 10 toward the fixed costs of $12\,500$ a month. Break-even quantity $=$ fixed costs $/$ contribution $= 12\,500 / 10 = 1\,250$ repairs a month: below it the month loses money, above it every extra repair adds 10 of profit. The margin of safety 安全边际 is actual output minus break-even: $2\,000 - 1\,250 = 750$ repairs, or $37.5\%$ of sales — the fall the business can absorb before losses. TARGET output for a chosen profit $=$ (fixed costs $+$ target profit) $/$ contribution: a $15\,000$ monthly profit needs $(12\,500 + 15\,000)/10 = 2\,750$ repairs. The chart plots TR and TC against output, crossing at $1\,250$. LIMITATIONS: costs and price are assumed constant, output assumed sold, step-fixed costs ignored — it is a model, and a fragile one far from the current output.

Worked example (original): the chart under change. At $1\,500$ repairs: revenue $25 \times 1\,500 = 37\,500$; total cost $12\,500 + 15 \times 1\,500 = 35\,000$; profit $2\,500$ — the margin of safety $250 \times$ contribution $10$, as the chart's widening TR–TC gap shows. Now price rises to $27$ (contribution $12$) but rent steps up $3\,000$: BEQ $= 15\,500/12 \approx 1\,292$ — barely moved, yet the margin of safety falls $750 \to 708$. A higher price need not mean more safety: that is the evaluative sentence the model exists for.

• The transformation process; efficiency vs effectiveness; labour productivity $2\,000$/80 = 25 (5.1).

• Job, batch, flow with benefits and limitations; mass customisation as the synthesis (5.2).

• Quantitative vs qualitative location factors with the service/cost split (5.4).

• Contribution 10; BEQ $1\,250$; margin of safety 750 = 37.5%; target $2\,750$ for $15\,000$; the chart and its limits (5.5).

Boundary notes: Paper 2 examines every calculation here — productivity and the full break-even arithmetic — with the formula, substitution and answer; Paper 1 examines methods and location in context; the research project often takes an operations issue through the lens of sustainability or efficiency. All worked numbers are original and reconcile with the Unit 3 accounts.