Business Decision Making

This research report explores the importance of effective decision making in business, specifically in the travel and tourism industry. It discusses the collection of primary and secondary data, survey methodology, and questionnaire preparation. It also covers the creation of information for decision making, analyzing data using measures of dispersion, and the role of quartile, percentile, and correlation coefficient in making effective decisions. The report provides insights into the current state of the travel and tourism industry in the UK.

Business Decision Making

Table of Contents
INTRODUCTION......................................................................................................................4
TASK 1......................................................................................................................................4
1.1 Plan for the collection of primary and secondary data.....................................................4
1.2 Stating the survey methodology and sampling frame......................................................5
1.3 Preparing questionnaire....................................................................................................5
TASK 2......................................................................................................................................7
2.1 and 2.2 Creation of information for decision making by summarizing data...................7
2.3 Analyzing data by suing the measures of dispersion.....................................................13
2.4 Explaining the ways in which quartile, percentile and correlation co-efficient helps in
making effective decisions...................................................................................................13
TASK 3....................................................................................................................................14
3.1 Producing graphs and charts using spreadsheets...........................................................14
3.2 Creating a trend line for forecasting a future event........................................................17
3.3 Preparing a business presentation..................................................................................17
3.4 Producing a formal business report for the proposed new product development
initiative................................................................................................................................17
TASK 4....................................................................................................................................18
4.1 Preparing a project plan and determining the critical path............................................18
4.2 Assessing the financial viability of the project by using the investment appraisal tool 19
CONCLUSION........................................................................................................................21
REFERENCES.........................................................................................................................22

INTRODUCTION
In the present scenario, effective decision making is very important for overall
success of an organization. Furthermore, managers are being required to take wide range of
decision regarding areas such as human, financial, management etc. Effective decisions at
regular intervals supports in carrying out smooth flow of operations and activities. Along
with this, it also contributes in enhancing existing sales and profits of a company. At the time
of making decisions it is required by businesses to take several aspects into consideration.
This includes employee satisfaction, nature of business, size of company, changing market
trends etc. It can be expressed that all these areas and activities has huge impact on activities
and overall performance of a business enterprise. The present research report explains the key
sources from which primary and secondary data can be collected. Along with this, it also
highlights a questionnaire which has been used to collect information from sources.
TASK 1
1.1 Plan for the collection of primary and secondary data
On the basis of information provided, ABC Company will be introducing new range of
tour related services in order to acquire higher degree of customer satisfaction. In the modern
era, the competition among businesses operating in travel and tourism industry has become so
intense that it is no longer easy for companies to gain competitive advantage over other
market players (Zsambok and Klein, 2014). Along with this, firms have also started facing
issues in increasing their existing sales and customer base. In order to introduce new service
in the marketplace, it is required by ABC Company to conduct appropriate market research.
This will help the brand in identification of changing customer need and demand. Apart from
this, market research will also support in providing very useful information regarding new
product or service development. For the purpose of introducing new range of service in
marketplace, ABC Company will need to conduct two different types of researches which are
primary and secondary. The plan for collecting primary and secondary data is mentioned
below as:
 Primary data- It is considered as one of the most reliable and fresh data as the
information collected is for the first time. The rationale why this type of data is
considered as more reliable is that it is collected by the researcher himself or herself.

Primary data also gives more detailed information about the topic which has been
taken into consideration (Power, Sharda and Burstein, 2015). In order to introduce
new range of services, ABC Company will be collecting primary information by
using survey method.
 Secondary data – It is a kind of data which has been already collected by someone
else for other researches and studies. It can be stated that as compared to primary data,
secondary information is considered as very less reliable and accurate. This data can
be collected three main sources which are books, online sources and journals. Here,
all the above mentioned sources will be used by ABC Company in order to analyse
the present market trend in travel and tourism industry. Along with this, it will also
give more in-depth knowledge about the current gap between demand and supply of
services within the industry.
1.2 Stating the survey methodology and sampling frame
It can be stated that in order to develop and introduce new range of services and
products in the market, ABC Company will need to define sample and its appropriate size
from which information can be collected. Here, the researcher will be using a well structured
questionnaire which will consist of both open and close ended questions. It can be stated that
random sampling method will be used as the primary data will be collected by travellers and
tourist in the country. The sample size for collecting information is going to be 30. For the
purpose of collecting primary information, survey method will be used as it is more suitable
and accurate as per the nature of research being carried out by ABCD Company. The use of
survey methodology will also support in providing appropriate knowledge about the key
stages or strategies which can be used in order to collect the information in most appropriate
manner (Yager and Kacprzyk, 2012). On the basis of aim and purpose of research, a
questionnaire will be developed and the researcher will be sending the same to different
tourist and travellers in the country. In addition to this, the questionnaire will be send through
email on id of the tourist and travellers which has been randomly selected for conducting
survey. This will assist in getting adequate information about the changing need of people in
the market and the gap which exists between existing demand and supply. Here, the main
objective of ABC Company is to gain reliable, adequate and accurate information about the
existing situation travel and tourism industry. Out of the various sampling technique, random
sampling method which is a part of probabilistic sampling will be considering and the sample
size selected will be 30 travellers or tourist within London.

1.3 Preparing questionnaire
Demographic information
Name______________________________
Age
 Below 25
 26-35
 36-45
 Above 45
Gender
 Male
 Female
1. How often do you travel?
1. Often
2. Once in month
3. Half yearly
4. Annually
2. The current services and product provided by UK tourism industry are satisfactory?
 Yes
 Can’t Say
 No
3. In London adequate arrangements and facilities are there regarding travel and
tourism ?
 Strongly Agree
 Agree
 Neutral
 Disagree
 Strongly disagree
4. Do you think that there is a gap between existing demand in industry and the supply
of services by business against the same?
 Yes
 Can’t say
 No

5. There are wide ranges of companies in tour industry which is offering customized
products and services to customers or travellers?
 Yes
 Can’t say
 No
6. What are the key factors lacking in travel and tourism industry of UK ?
 Lack of proper food and accommodation facilities
 Development of tourist destination
 Support from government
 Lack of customized tour related product and services
7. What are the key services and products which you want in a customized tour
package?
________________________________________________________________________
________________________________________________________________________
__________________________________________________________________
8. What are your recommendation to businesses in tour industry in order to enhance
their sales and profits?
________________________________________________________________________
________________________________________________________________________
__________________________________________________________________
TASK 2
2.1 and 2.2 Creation of information for decision making by summarizing data
Year Sales Profit
2006 1150 150
2007 1250 160
2008 1450 190
2009 1530 210
2010 1650 225

2011 1800 230
2012 1890 250
2013 1950 265
2014 2200 280
2015 2350 350
Sales Profit
Mean 1722Mean 231
Standard Error 123.6105Standard Error 18.80898
Median 1725Median 227.5
Mode #N/A Mode #N/A
Standard Deviation 390.8907Standard Deviation 59.47922
Sample Variance 152795.6Sample Variance 3537.778
Kurtosis -0.83528Kurtosis 0.530243
Skewness 0.125756Skewness 0.581642
Range 1200Range 200
Minimum 1150Minimum 150
Maximum 2350Maximum 350
Sum 17220Sum 2310
Count 10Count 10
Descriptive analysis

It can be stated that in order to carry out evaluation of information collected, the
scholar gas adopted for descriptive statistics (Solomon, 2014). It has helped the researcher in
getting more detailer and in-depth information about the topic which has been investigated.
From the above carried out descriptive analysis, it can be analysed that ABC Company will
have average sales of 1722 every year. However, it can be argued that in the middle of the
above mentioned ten years that is in the fifth year 1725. This clearly indicates the fact that
there is somewhat a difference between median and mean which has been calculated. In order
to increase the sales and profits of new customized tour packages and services, it will be
required by ABC Company to put more efforts on product development and marketing of the
same. Here, both traditional and modern marketing tools can be used by the brand in order to
create more and more awareness among travellers, tourist and attract them to purchase the
same. This will increase the overall cost of operation in short run but will provide wide range
of benefits to ABC Company in long run.
There are wide ranges of companies in tour industry which is
offering customized products and services to customers or travellers
Number of
respondents
Perce
ntage
Yes 5
16.666
66667
Can’t say 2
6.6666
66667
No 23
76.666
66667
Total 30

There are wide ranges of companies in tour industry which is
offering customized products and services to customers or
travellers
Yes
Can
No
Tot
What are the key factors lacking in travel and tourism
industry of UK
Number of
respondents
Percentag
e
Lack of proper food and accommodation facilities 4
13.333333
33
Development of tourist destination 6 20

Support from government 8
26.666666
67
Lack of customized tour related product and services 12 40
Total 30
What are the key factors lacking in travel and tourism
industry of UK
Lack of proper food and
accommodation facilities
Development of tourist destination
Support from government
Lack of customized tour related
product and services

Do you think that there is a gap between existing demand in
industry and the supply of services by business against the same
Number of
respondents
Perce
ntage
Yes 23
76.666
66667
Can’t say 3 10
No 4
13.333
33333
Total 30
Do you think that there is a gap between existing demand in
industry and the supply of services by business against the
same
Yes
Can’t say
No

2.3 Analyzing data by suing the measures of dispersion
Measures of statistical dispersion include mean, median and variances which helps
company in assessing the extent to which the sales and profit will deviate in the near future
(Woiceshyn, 2011).
Calculation of measures of dispersion
Particulars
Sales
(in £)
Profit
(in £)
Mean 1722 231
Mode
#N/A #N/A
Median 1725 227.5
Standard
deviation
390.89
1 59.4792
From the above dispersion analysis it has been assessed that average sales and profit
of ABC is £1722 and £231. Along with this, median sales and profitability account for the
amounted to £1725 and £227.5. These figures clearly reflect that average and median sales
revenue as well as profitability margin are similar to the large extent. Further, according the
above analysis possibility in relation to the deviation which will take place in sales and
profitability amount is £390 and £59. Thus, ABC requires considering all such aspects while
doing business panning for the expansion and development purpose.
2.4 Explaining the ways in which quartile, percentile and correlation co-efficient helps in
making effective decisions
Quartile and percentile: Both these are the most effectual statistical tools which
divides the whole data set into the quarters. Hence, by using such tools ABC can assess the
average and higher sales generated by the firm over the years (Ho, Xu and Dey, 2010). The
only difference between the above two is that percentile presents the figure in form of
percentage (Wright, 2014). In this way, such tools facilitate better understanding regarding
the data set.
Calculation of quartile
Particular
s
Sale
s Profit
Q1 1470 195
Q2 1725 227.5

Q3 1935 261.25
Statistical analysis shows that sales and profit of the firm is continuously increasing.
Moreover, in the first quarter sales generated by the firm amounted to £1470. In contrast to
this, sales revenue of the ABC in the third quarter accounted for the amount of £1935. Along
with this, profit of the firm also inclined from £195 to £261.5 at the end of third quarter.
Hence, it shows that customers having positive attitude towards the services offered by ABC.
In this, by developing and introducing the new packages business unit can build or sustain
competitive edge over others.
Computation of percentile
Particulars Sales Profit
25th percentile 1470 195
50th percentile 1725 227.5
75th percentile 1935 261.25
Correlation co-efficient: This measure helps business organization in determining the
relationship between two variables (Zimmerman and Yahya-Zadeh, 2011). Through this,
company can assess the impact of one variable on another more effectively and efficiently.
Particulars Sales Profit
Sales 0.98 1
Profit 1 0.98
Statistical evaluation shows that highly positive relationship exists between the two
variables such as sales and profit. Correlation of.98 states that both the variables will grow
and decline in the similar direction. In this way, sales and profit aspects are highly associated
with each other. Thus, ABC needs to place emphasis on the promotional aspects for
developing awareness among the customers about the tour services offered by it. This in turn
helps company in enhancing the sales and thereby profit as well. Thus, business unit needs to
consider all such aspect while formulating the competent strategic and policy framework.
TASK 3
3.1 Producing graphs and charts using spreadsheets
Column graph

1 2 3 4 5 6 7 8 9 10
0
500
1000
1500
2000
2500
sales
profit
Bar chart
1
2
3
4
5
6
7
8
9
10
0 500 1000 1500 2000 2500
profit
sales
Line graph

1 2 3 4 5 6 7 8 9 10
0
500
1000
1500
2000
2500
sales
profit
Scatter diagram
2004 2006 2008 2010 2012 2014 2016
0
500
1000
1500
2000
2500
sales
profit
The above mentioned graphs and charts depict that from the last 10 years sales and
profit margin of ABC continuously increased. Moreover, in the accounting year 2006 sales of
ABC was £1150. On the other side, in the financial year 2015 sales revenue of the firm was
£2350 which is higher than the previous years. Further, profit of the business unit also
increased from £150 to £350 at the end of the accounting year 2015. Thus, it can be stated
from such graphs that business unit has attained success in attracting the customers towards
the tour packages (Gigerenzer and Gaissmaier, 2011). In this, by developing the unique or
innovative tour packages according to the preferences of people ABC can attract both
existing as well as potential customers and thereby enhance the market share.

3.2 Creating a trend line for forecasting a future event
Trend line: It is the technical analysis which provides deeper assistance to the firm in both
trend identification and confirmation. By conducting such analysis ABC Company can make
estimation regarding their future growth and development. Moreover, sales and profit are the
main indicators which provide deeper insight about the extent to which customers frequently
make investment in the tour packages (Trend Line, 2016). Hence, by making trend line
business enterprise can take suitable decision in relation to the growth and expansion.
1 2 3 4 5 6 7 8 9 10
0
500
1000
1500
2000
2500
f(x) = 128.363636363636 x + 887.636363636364
f(x) = 19.030303030303 x + 107.30303030303
sales
Linear (sales)
Linear (sales)
profit
Linear (profit)
Above depicted trend shows growing trend in the sales and profit margin of the firm.
By considering such trend line it can be stated that sales of ABC will incline in the near
future. Further, along with the sales, profit margin of the business enterprise would be
increase and thereby helps company in attaining success. Thus, on the basis of such trend it
can be said that by exploring the business in the sector travel and tourism ABC can maximize
both productivity as well as profitability to the significant level. Moreover, once loyalty has
been built among the customers regarding brand thereafter they prefer to use or experience
the all the services which are offered by the respective company (Albright, Winston and
Zappe, 2010). Hence, by developing new and strengthening the new tour package business
unit will attain success to the great extent.
3.3 Preparing a business presentation
Enclosed in power point presentation.
3.4 Producing a formal business report for the proposed new product development initiative
To,

Board of Directors of ABC Ltd.
Date: 1st November, 2016
From the secondary data analysis it is reported to the management that sales and profitability aspect of
the firm is rising more frequently year by year. It shows that customers are highly satisfied from the
tour packages or services offered by ABC Ltd. Moreover, now customers spend money in the services
which have the attribute of high quality and innovation. Besides this, trend line also depicts that there
is high level of possibility that sales and profit of the firm will grow in the near future. Hence, by
including the attractive destination in the plan business unit can attract the large number of customers.
Along with this, by bridging the gap through the means of innovation business unit can get the desired
level of outcome or success. Moreover, now customers prefer to visit the places that make their
holiday experience memorable and worthful. Thus, by developing the new product business enterprise
can make contribution in the achievement of organizational goals and objectives.
TASK 4
4.1 Preparing a project plan and determining the critical path
Plan for the development of new tour packages is enumerated below:
S. No. Activities of the research Immediate
predecessors
Duration (in days)
1. Preparing framework for
evaluating the customer
satisfaction and preferences
towards the tour packages
- 18
2. Collection of data (Primary
and secondary)
1 9
3. Structuring and analyzing data
through the means of both
thematic perception test and
statistical analysis
2 15
4. Formulation of budget 2 and 3 10
5. Development of new plan 3 and 4 8
6. Offering attractive tour
packages to the customers
5 12

7. Monitoring of the plan by
taking into account the
benchmarking technique
(Wahlen, Baginski and Bradshaw,
2014).
6 7
8. Making changes in the plan
according to the feedback
provided
7 11
From the above network diagram it has been assessed that there are mainly three
critical paths which can be followed by the firm are:
Path 1: 1+2+3+5+6+7+8
18+9+15+8+12+7+11
= 80 days
Path 2: 1+2+3+4+5+6+7+8
18+9+10+15+8+12+7+11
= 90 days
Path 3: 1+2+4+5+6+7+8
18+9+15+8+12+7+11
= 75 days
From the above mentioned gateway, ABC needs to undertake path 3 which in turn
helps them in executing the plan at cost effectual price.
4.2 Assessing the financial viability of the project by using the investment appraisal tool

In the present era, it is not possible for the firm to analyze the financial viability
without conducting in-depth analysis. Moreover, investment aspect of the proposal is highly
associated with the profit aspect of firm (Peetz and Buehler, 2013). Hence, by using payback,
NPV and IRR ABC company can assess the attractiveness and profitability aspect to the large
extent.
Payback period
Year
Cash
inflow
of
proje
ct A
Cumulati
ve cash
inflow
Cash
inflow
of
proje
ct B
Cumulati
ve cash
inflow
1
10000
0 100000
10700
0 107000
2
12000
0 220000
12600
0 233000
3
11300
0 333000
12100
0 354000
4
12800
0 461000
13600
0 490000
5
14500
0 606000
15000
0 640000
Project A: 2 + 30000 / 113000
= 2.3 years
Project B: 2 + 17000 / 121000
= 2.1 years
Computation and NPV and IRR are enumerated below:
Year
Cash
inflow
of
projec
t A
Discountin
g factor
Discounte
d cash
inflow
Cash
inflow
of
projec
t B
Discounte
d cash
inflow
1 100000 0.909 90900 107000 97263
2 120000 0.826 99120 126000 104076
3 113000 0.751 84863 121000 90871
4 128000 0.683 87424 136000 92888
5 145000 0.621 90045 150000 93150
Total discounted cash
inflow (TDCI) 452352 478248

Less: Initial investment
(II) 250000 250000
NPV (TDCI - II) 202352 228248
IRR 36% 40%
By making evaluation of the two proposed investment it has been assessed that ABC
company will recover initial investment within the period of 2 years and 1 month in the case
of project B. On the other sides, business unit has to wait for 2 years and 3 month in project A
for getting back the initial amount. Further, IRR of project B is also greater than the proposal
A. Along with this, NPV of proposal A and B is £202352 & £228248. Hence, it can be said
that by selecting the proposal B business unit will earn high return after the period of five
years. Thus, ABC needs to employ money in the project B which proves to be more
beneficial for it.
CONCLUSION
From the above report, it has been articulated that now customers prefer to purchase
the tour packages with the aim to make their travel experience memorable. Further, it can be
concluded that customers are highly satisfied from the tour packages offered by the company.
Besides this, it can be revealed from the trend line that sales and profit of the firm will grow
in the near future. Further, it can be inferred that highly positive correlation exists between
the sales and profit margin of the firm. It can be seen in the report that project plan helps
business unit in the implementation of project by preventing the confusion to the large extent.
Along with this, it has been articulated that by investing money in proposal B ABC can aid in
the profit margin of firm.

REFERENCES
Books and Journals
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Ho, W., Xu, X. and Dey, P.K., 2010. Multi-criteria decision making approaches for supplier
evaluation and selection: A literature review. European Journal of Operational Research.
202(1). pp.16-24.
Peetz, J. and Buehler, R., 2013. Different goals, different predictions: Accuracy and bias in
financial planning for events and time periods. Journal of Applied Social
Psychology. 43(5) pp.1079-1088.
Power, D.J., Sharda, R. and Burstein, F., 2015. Decision support systems. John Wiley &
Sons, Ltd.
Solomon, M.R., 2014. Consumer behavior: Buying, having, and being. Engelwood Cliffs,
NJ: prentice Hall.
Wahlen, J., Baginski, S. and Bradshaw, M., 2014. Financial reporting, financial statement
analysis and valuation. Nelson Education.
Woiceshyn, J., 2011. A model for ethical decision making in business: Reasoning, intuition,
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Wright, D.A., 2014. Apparatus and method for a financial planning faith-based rules
database. U.S. 8. pp.635,101.
Yager, R.R. and Kacprzyk, J. eds., 2012. The ordered weighted averaging operators: theory
and applications. Springer Science & Business Media.
Zimmerman, J.L. and Yahya-Zadeh, M., 2011. Accounting for decision making and control.
Issues in Accounting Education. 26(1). pp.258-259.
Zsambok, C.E. and Klein, G., 2014. Naturalistic decision making. Psychology Press.
Online
Trend line. 2016. Online. Available through: <study.com/academy/lesson/what-is-a-trend-
line-in-math-definitions-equation-analysis.html>. [Accessed on 1st November 2016].