A Non-Profitable Option Available to Business Firms

According to the given assignment content, it is stated that NPV (Net Present Value) of Cuba is the lowest negative value, making it a viable option for the business firm. Internal rate of return is also low for Cuba, implying its viability compared to other options. The conclusion drawn from this study emphasizes the importance of considering test, preferences, and behavior of consumers before making new products. Additionally, investment appraisal tools are essential for supporting organizations in making sound judgments about investments that can lead to high profits.

Business Decision Making

TABLE OF CONTENTS
Introduction.................................................................................................................................................3
Task 1...........................................................................................................................................................3
1.1 Plan for data collection......................................................................................................................3
1.2 Survey methodology and sampling framework.................................................................................4
1.3 Questionnaire ...................................................................................................................................5
Task 2...........................................................................................................................................................7
2.1 Measures of central tendency...........................................................................................................7
2.2 Analysis of results..............................................................................................................................7
2.3 Measures of dispersion......................................................................................................................8
2.4 Quartile, percentile and correlation coefficient.................................................................................9
TASK3...........................................................................................................................................................9
3.2 trend line.........................................................................................................................................13
3.3 Business presentation......................................................................................................................14
3.4 Business report for new product development...............................................................................14
Task 4.........................................................................................................................................................15
4.1 Information processing tool for the launch of a new tour product..................................................15
4.2 Project plan and critical path...........................................................................................................15
...............................................................................................................................................................18
4.3 Project evaluation method..............................................................................................................19

Conclusion.................................................................................................................................................20
References.................................................................................................................................................21

Introduction
Future of an organization completely depends upon the business decisions. It can be related to assets, liability, investment etc.
For accomplishing the objective entity has to opt the best option through which it can meet with its target. Present report is based on
the Thomas cook which is an international tour operator and working tremendous in the travel and tourism industry. Survey
methodology and sampling frame related to business will be described in this assignment (Bharadwaj and et.al, 2013). Current
assignment will discuss the sources of primary and secondary data collection for the new tour products. In order to gather information
related to consumer profile, preferences, buying behavior questionnaire will be prepared by the researcher. Data will be collected from
90 customers and this information will be analyzed in this study. Mean, mode, median, standard deviation, investment tools will be
calculated in this report for making the sound business decision so that company can make its new tour product more successful and
can achieve its target significantly (Cao, Duan and Li 2015).
Task 1
1.1 Plan for data collection
In the modern life, people have high interest in the holidays and travel. They like to visit new places and attractive points etc.
In technological era most of the tour operators are offering them attractive tour packages. So it is essential for the Thomas cook that to
know consumers behavior, their needs, market trends in order to provide them satisfactory tour packages. For that data will be
collected by two sources; primary and secondary (Merigó. and Gil-Lafuente, 2012).
Primary sources
These are first hand information which are collected for specific subject matter by researcher own. This is very important tool
and can give real detail about market trends and needs of travelers. Several methods of primary sources are such as interview, survey,

observation etc. For developing the new tour product Thomas cook is required to gather information related to major needs of
consumers and what they expected to get. On the bases of this cited firm can design its products and services. For collecting details
survey is the great way and can help in achieving goal of the company. Researcher can communicate with the customers via email,
social networking sites etc. Questionnaire is the way that can support the scholar in getting details for the same ( Newell, Lagnado and
Shanks, 2015). London population would be sample an individual can ask the questions with 90 customers. They can share their
feelings, needs, and desires with the help of questionnaire. That would be beneficial in identifying the requirement of people and
accordingly company will be able to design appropriate tour package.
Secondary sources
Researcher can take support of already available data such as books, journals, internet articles etc. These are such information
which have been gathered by other scholars for other purposes but these detail can help in knowing the consumers behavior and their
perception about travels (Resende and de Sousa, 2013). By this way Thomas cook will be able to measure and uncertainties and will
be able to plan accordingly. Previous studies on the same topic has discussed about taste and preferences of the consumers. That will
be taken into consideration by the entity and it can design its new travel package as per the needs of the travelers. Apart from this
company will be able to know about risk which has taken place in other tour organization in past few years so it will formulate
strategy that can help in reducing uncertainty in advance.
1.2 Survey methodology and sampling framework
Sampling frame work
There are several types of sampling frame work majorly it is divided into two main sections; probability and non probability.
The main aim of the researcher is to gather information about desires, buying behavior of the London population so that Thomas cook
can design its tour package. For that probability sampling would be good. In this there are several techniques such as random, stratum
etc. But for present study random sampling frame work would be appropriate. In this scholar can select 90 customers randomly with

whom individual can fill up questionnaire (Wang and Zhang, 2013). That would be best way and investigator will be able to gather
relevant information about current trends, preferences of consumers.
Survey methodology
Before designing the tour package it is necessary to identify the needs, preference of the consumers. With the help of survey
individual will be able to gather relevant information about their needs and expectation. Survey is the way through which lacking
point in existing tour packages can be identified and accordingly manager of Thomas cook will be able to design new package in order
to enhance its sales volume and profit (Kacprzyk and Fedrizzi, 2012). There are many methods of survey such as questionnaire,
interview, documentation review etc. All these techniques support the researcher in gathering in depth information about the subject
matter. In the questionnaire individual prepare questions and collect large size information in very less period. Interview is the
technique in which people give response as per their emotional status, experience. In the present report scholar has taken support of
questionnaire. By this way individual can gain large data and reliable information soon.
1.3 Questionnaire
Que. 1. How old are you ?
 20-35 years
 35-50 years
 50-65 years
 65 years and more
Que. 2: Do you agree that Tour services and products offered by Thomas are satisfactory ?
 Highly disagree

 Disagree
 Neutral
 Agree
 Highly agree
Que. 3: How frequently do you travel to different destinations?
 Once in a month
 Twice in a year
 Once in a year
 Thrice in a year
 Very rarely
Que. 4. What is your approx budget for the tour pacakages?
 £500 but less than 535
 £535 but less than 550
 £550 but less than 585
 £585 but less than 610
 £610 but less than 635
Que. 5: Up to which pricing level of the tour product you will pay for each traveler for the tour of destination B which is Turkey ?
 £500 but less than 525

 £525 but less than 550
 £550 but less than 575
 £575 but less than 600
 £600 but less than 625
Que. 6. Rank the below options as priority that must be included in tour packages at scale of 1-5?
2 3 4 5 1
Accommodation facilities1
20 30 10 10 30
Local guide
5 20 15 30 20
Packages needs to be
affordable 25 15 20 10 20
Sports tour packages
10 25 15 20 20

Task 2
2.1 Measures of central tendency
Measures of central tendency refer to the descriptive statistics tools that are used to make decisions by the managers. There are number of
descriptive analysis tools like mean, median and mode that are used to make decisions by the managers. Mentioned tools are described below. Mean: Mean is the method and one of the important components of the measures of central tendency that is used to measure the level of
performance of the variable. It is the tool that reflects the performance of the variable that is observed most of time ( Huber, 2011). It can
be said that it is the one of the most important tool of the descriptive statistics that is used to evaluate the specific variable. Median: Median is tool that is used for division of the entire data set. In the specific set of figures there are many different information’s
that cannot be identified by an individual by taking a single look on the data set.
 Mode: Mode is the tool that is used to find out pattern that is coming in existence multiple times in the data set. It can be said that there is
huge importance of the mode for the data scientists.
2.2 Analysis of results
Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11
Mean 4 4 4 4 3 4 4 4 4 4 3
Median 4 5 4 5 3 5 4 4 4 4 2
Mode 5 5 5 5 3 5 5 5 4 4 2
Interpretation
Mean: Mean value is reflecting that most of the respondents are satisfied with the tour package that is provided by the tour operators.
Mean value 4 and mode value 5 are supporting this fact. Most of the respondents are agree on the fact that they will prefer to visit
Turkey as this fact is supported by the fact that mean value is 4 and mode is 5. For a tour in Turkey people are prepared to make
expenditure in range of £675-£700. However, there are few people that are prepared to make purchase in range of £700-£725. In case

of Cuba people are prepared to make expenditure of £875-£900. This means that people are prepared to make more expenditure on
Cuba tour package then Turkey.
Median: Median is another tool that is used to evaluate the variable. Most of the variables values is 4 and this is the value that is
classifying data in to multiple parts. Median value for people visit to Turkey is 5 and same for tour package is 5 which means that it is
the value 5 this is dividing entire date set that is obtained from respondents in multiple parts.
Mode: Value of mode is reflecting that most of respondents are agree on the fact that they prefer to take tour package of the firms. It
can be seen from the table that mode value is 5 and this is clearly indicating that there are number of people as mentioned about
desired to visit Turkey at tout package of £700-£725. In case of Cuba also same results are obtained. Thus, it can be said that people
prefer to visit both Turkey and Cuba.
Table 1Computation of mean, median and mode
Mean Median Mode
Destinations in southern Europe 265 287 #N/A
Destinations in Africa and Middle East 109 114 108
Destination in Asia 352 342 #N/A
Destination in South America 48 29 34
Destinations in North America 141 127 120
Other destinations 57 54 #N/A
Interpretation
Mean: Mean sales value is high in case of Asia, South Europe and North America whose mean sales values are 352,265 and 141. In
case of other destinations and South America average sales are low 57 and 48. Moderate number of sales are made in Africa and
Middle East. It can be said that Asia, South Europe and North America are most profitable destinations.

Median: Median value is breaking data set in two parts and indicate that in all geographic areas sales are fluctuating consistently.
Hence, it can be said that there is risky to focus on specific nations for earning large amount of money.
Mode: Value of mode in case of Africa and Middle East is 108 which means that multiple times earnings of £108 is made in the
mentioned geographic area. In case of South and North America mode value is 34 and 120 which reflects that in previous one sales of
£34 and in latter one sales of £120 is made. It can be said that in all these nations repeatedly lower sales then average are made which
reflect that below average sales can be made in relevant region in upcoming time period.
2.3 Measures of dispersion
Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11
STDEV 2 1 1 1 1 1 1 1 1 1 1
Interpretation
Inter quartile range reflects the difference that exist between third and first quartile. Standard deviation value is low in case of all asked
questions which reflects that there is no difference between mean value and response given by the respondents. ( Zealand, 2013). Standard
deviation is the tool that is used by the entities to quantify the variation amount. If the value is low that means stat point tend is near
about to the mean value and if it is high than means data point are far away from the mean values. Standard deviation value is 1 and
this reflects that respondents response is not deviating at fast pace. This means that most respondents are giving answers in same
direction. This means that majority of respondents prefer to visit places in Turkey and Cuba.
2.4 Quartile, percentile and correlation coefficient
Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11
Q1 3 4 3 3 2 4 3 3 3 3 2
Q2 4 5 4 5 3 5 4 4 4 4 2
Q3 5 5 5 5 4 5 5 5 5 5 3

Interpretation
Quartile and percentile like median classified group of values in to four equal parts (Siegel, Naishadham and Jemal, 2013).
Value of quartile in all questions is one which reflects that data in all asked questions is equally classified by the statistical tool. Value
of quartile is 4, 5, 5 for Q1, Q2 and Q3. This means that data is classified in three categories agree and strongly agree. In case of
variable people prepared to pay on tour package Q1, Q2 and Q3 value is 3, 4 and 5. This is reflecting that data is classified in 675,700
and 725 category. This means that most of respondents are prepared to make expenditure in the range of £675 to £725. In case of
people intention to purchase tour in Cuba also median value is same 3,4 and 5 and this means that majority of respondents are either
neutral, agree or strongly agree on asked statement. Similarly, in case people prepared to make expenditure in Cuba quartile values are
3, 4 and 5. This means that majority of respondents are prepared to make expenditure on Cuba package in range of £850 to £925.
TASK3
3.1 data analyses
Theme 1: Age of the respondents.
20-35 40
35-50 30
50-65 15
65 year and more 5
Interpretation: From the discussion it is found that maximum people belong to 20-35 year group. They like to travel the most. So it can be
interpreted that Thomas cook needs to focus on this group for its new tour package. By this way it will be able to gain high profit and will be able
to attract more consumers.
Theme 2: Tour services and products offered by Thomas are satisfactory
Highly disagree 35

Disagree 25
Neutral 15
Agree 10
Highly agree 5
Interpretation: From the discussion it is found that maximum respondents are satisfied with the travel services of Thomas cook. That shows that
company has high opportunity to grow well and it can successfully design new product as per the needs of users.
Theme 3: frequency of travelers to travel in different destinations?
Once in a month 25
Twice in a year 35
Once in a year 10
Thrice in a year 15
Very rarely 5
Interpretation: From the discussion it is found that maximum population of London travel twice in a year. So it can be said that target consumers
are many so there is high opportunity to get profit for the Thomas cook if it designs the product well.
Theme 4: Approx budget for the tour packages of travellers?
£500 but less than 535 35
£535 but less than 550 20
£550 but less than 585 15
£585 but less than 610 18
£610 but less than 635 2
Interpretation: From the discussion it is found that maximum people have budget £500 but less than 535. That shows that cited
firm needs to work upon its pricing factor and should design the products well which can be affordable by the population easily.
That would help in attracting more people towards the brand.

Theme 5: Ranking to services of tour packages.
1 2 3 4 5
Accommodation facilities1
20 30 10 10 30
Local guide
5 20 15 30 20
Packages needs to be
affordable 25 15 20 10 20
Sports tour packages
10 25 15 20 20

1 2 3 4 5
0
5
10
15
20
25
30
35
20
30
10 10
30
Accommodation facilities1

Local guide
0 1 2 3 4 5 6
Column D
Column E
Column F
Column G
Column H
rank Packages needs to be affordable
0
1
2
3
4
5
6
4
Column E
Column F
Column G
Column H
Column I

Sports tour packages
0
5
10
15
20
25
30
5
Column D
Column E
Column F
Column G
Column H
From the above charts it can be said that most of the respondents have given high rank to accommodation facilities it means
travel operators needs to include this think in their tour package. Maximum answers have said that local guide is necessary who can
guide them well. 25 respondents have said that they want affordable travel packages it will attract them towards the brand and they
will plan the tour.
3.2 trend line
Trend line equation is regression equation.
Figure 1Trend analysis chart
Interpretation

Trend analysis is the one of the main tool that is used to make prediction about the variable (Siegel, Miller. and Jemal, 2015).
In this tool there is no complexity and anyone can apply same to make decisions. It can be seen from the table that trend line is not
crossing the last bar and this means that in the upcoming time period pressure may be observed on sales value and same will remain
below current level. Hence, it can be said that in the upcoming time period sales value will remain below current sales level. Firm
needs to formulate strong business strategy in order to increase sales of its product because by doing so it can enhance its market share
at rapid pace in the market. There are various other tools that can be used to make prediction like simulation model can be build up
and on basis of obtained results decisions can be taken by the managers. It can be said that there is significant importance of the trend
analysis and other methods of prediction.
3.3 Business presentation
3.4 Business report for new product development
To,
General Manager
Thomas Cook, London
Date: 24 April 2017
Introduction
The research is being done with the purpose of identifying the needs of consumers so that it company can develop the travel
products for the consumers. For knowing the actual behavior of population and to design the products as per the need of people
research has asked questions with 90 respondents.
Discussion
From the above research it is found that Thomas cook is very capable for developing its new products. Company is having
skilled employees those who are very since long time in this industry. It is found that company is focusing on needs of consumers and
providing them satisfactory services. Current sales figures show that existing products are very good and it is meeting with the needs

of travelers. For new tour product development it is needed that firm concentrate more on pricing factor and target the middle class
people. From the research it is found that maximum audience want affordable packages, they do not prefer high cost tour packages.
Apart from this it is also found that accommodation facilities are the priories of the consumers and they go with such tour package in
which accommodation facilities are included. so If it offers them good packages at affordable rates then cited firm will be able to
enhance its profit to great extent. Students and youngster are interested in traveling so in the new tour package it should include some
sports travel so that it can be able to attract more consumers.
Conclusion
Company needs to offer discounts and extremely well services, that would help in satisfying needs of customers and it will
give huge profit to the entity.
Task 4
4.1 Information processing tool for the launch of a new tour product
There are many effective tool that can support in information processing, these are described as below: Transaction processing system: It is great tool that is helpful in processing the information effectively (Vázquez and et. al,
2013). By this way Thomas cook will be able to circulate necessary information to all departments such as sales, marketing,
production, operation etc. transaction processing system is the technique which supports department in utilizing the detail well
for developing the new tour package of Thomas cook. In this cited firm can store or record all detail in common serve that can
used for further development as well. Management information system: MIS is the software through which managers of cited firm can make sound decision related
to needs and preferences of customers. It is a system in which all detail or previous records are being stored in computers and
authorities measures its performance. By this way lacking point can be identified and accordingly entity can modify its
operations and can develop new products which can satisfy the consumer’s needs of travel (Bharadwaj and et.al, 2013).

 Decision support system: It is another information processing tool in which all information such as raw material, personal
knowledge etc. are complied in interactive software in order to find out the main issue. This tactical information would support
the authorities in making sound judgment related to product development. By this way new tour package will help in attracting
more consumers and it will enhance sales volume of the Thomas cook to great extent.
 Electronic point sale: it is the system which ensures the transparency in business. That would help in reducing mistakes relate
to payment and billing and all transaction will be clear (Newell, Lagnado and Shanks, 2015).
4.2 Project plan and critical path
S. No. Description Activities Predecessor Duration
1 Primary research
data collection
A 3
2 Idea screening B 5
3 Training program
for staff members
C A 2
4 Installation of
technology
D A 3
5 Preparation of
resource and
E D,B 3

allocation
6 Data analyses F E,C 5
7 Control and
monitoring
G C 1
8 Taking customer
feedback
H F,G 2
Task Name Durati
on Start Finish Predecessors Total Slack
Primary
research
data
collection
3 wks
Wed
11/30/1
6
Tue
12/20/1
6
0 wks
Idea
screening 5 wks
Wed
11/30/1
6
Tue
1/3/17 1 wk
Training 2 wks Wed Tue 1 4 wks

program for
staff
members
12/21/1
6 1/3/17
Installation
of
technology
3 wks
Wed
12/21/1
6
Tue
1/10/17 1 0 wks
Preparation
of resource
and
allocation
3 wks Wed
1/11/17
Tue
1/31/17 2,4 0 wks
Data
analyses 5 wks Wed
2/1/17
Tue
3/7/17 3,5 0 wks
Control and
monitoring 1 wk Wed
1/4/17
Tue
1/10/17 3 8 wks
Taking
customer
feedback
2 wks Wed
3/8/17
Tue
3/21/17 6,7 0 wks

Critical path:
= 1+4+5+6+8
Weeks= 3+3+3+5+2
= 16 weeks
4.3 Project evaluation method
Name of the
Tour product
Investment at
the initial
Variable cost
(CC)
Fixed cost
(FC)
Profit and
income
Cash
flow(VC+FC)
Tour A
(Morocco)
520000 500 225000 90200 315700
Tour B
( Turkey)
475000 475 250000 100190 350665
Tour C (Cuba) 459000 775 275000 110310 386085

Tour D
(Dubai)
550000 850 300000 120340 421190
NPV (Net Present Value)-
Name of the
Tour product
Investment at
the initial
Cash flow PV@9% Present value
(PV)
NPV
Tour A
(Morocco)
520000 315700 0.526 166157.89 -353842.10
Tour B
( Turkey)
475000 350665 0.526 184560.52 -290439.47
Tour C (Cuba) 459000 386085 0.526 203202.63 -255797.37
Tour D
(Dubai)
550000 421190 0.526 221678.95 -328321.05
IRR (Internal Rate of return)-
Name of the Tour
product
Investment at the initial Cash flow IRR

Tour A (Morocco) -520000 315700 -39.29%
Tour B ( Turkey) -475000 350665 -26.18%
Tour C (Cuba) -459000 386085 -15.89%
Tour D (Dubai) -550000 421190 -23.42%
Interpretation
NPV of all projects is negative and due to this reason there is no profitable option that is available to the business firm in the current time
period (Cressie, 2015). It can be observed that NPV of Cuba is lowest negative and due to this reason same is viable for the firm. Internal rate of
return is also low for Cuba in terms of negative value. Hence, it can be assumed viable then others.
Conclusion
From the above study it can be concluded that business decision can influence the overall activity of the organization. It is required to look
upon test, preferences, behaviour of consumers before making the new products. By this way company will be able to make sound design that can
help in satisfying the people. Investment appraisal tool are the essential parts that supports an entity in making sound judgement related to
investment that can help in gaining high profit to the organization.

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