Business Decision Making

This project focuses on the process of business decision making and its importance in the external market. It covers topics such as data collection, survey methodology, questionnaire design, data analysis using measures of dispersion, quartiles, percentiles, correlation, and more.

BUSINESS DECISION
MAKING

Table of Contents
INTRODUCTION.......................................................................................................................................3
TASK 1.......................................................................................................................................................3
1.1 Create plan for data collection...........................................................................................................3
1.2 present survey methodology..............................................................................................................3
1.3 Design questionnaire.........................................................................................................................4
2.1 Summarize of data.............................................................................................................................5
2.2 Analyze the results.............................................................................................................................6
2.3 Analyze data using measures of dispersion........................................................................................6
2.4 Explain quartiles, percentiles and correlation....................................................................................7
TASK 2.......................................................................................................................................................9
3.1 Producing graphs...............................................................................................................................9
3.2 Trend line........................................................................................................................................11
3.3 Business presentation.......................................................................................................................11
3.4 Business formal report.....................................................................................................................11
4.1 Information processing tools...........................................................................................................12
4.2 Prepare project plan to determine critical path.................................................................................12
4.3 Using financial tool for decision making.........................................................................................13
CONCLUSION.........................................................................................................................................14
REFERENCES..........................................................................................................................................15

INTRODUCTION
Decisions are integral part of the business which enhances the role of management in the
external market. Skills and the capabilities of an individual improve with the passage of time.
This project is all about opening a new restaurant in the city of London. This report stresses on
organizing research study in which research design and collection of data has framed. The
statistical measures are used in the business such as mean, median and mode. Graphs and
spreadsheets software’s are used in better presentation of the collected data. The projects
viability is judged on the basis of applying the capital budgeting technique.
TASK 1
1.1 Create plan for data collection
Current research study report is conducted by the existing owner of restaurant chain who
intends to open its new restaurant in the London. This is regarded as one of the strategy of
business expansion by the owner in order to gather large number of customers along with higher
market share (Welsh and Birch, 2015). Opening new restaurant in the London is beneficial for
the firm as this city is the famous tourist destinations in the whole world. There are two method
of collection of data will be used by the researcher which is given as below:
Primary collection- It is that technique in which supervisors are appointed by the firm who are
marketers of the firm. The attributes of customers are surveyed in order to design the best
suitable product according to the tastes and preferences of the customers. The survey will be
focuses on various parameters like product price, quality of the products liked by the customers,
fashion running in the market.
Secondary collection- Online surveyors will collect information on the current project of the
restaurant owner. Census data records are observed in order to know everything about the local
citizens of the London such as their family size, income of an individual.
1.2 present survey methodology
The owner of the restaurant is required to analyze the tastes and the preferences of
existing customers in the market (Petersen, Kushwaha and Kumar, 2015). The current product
launched by the owner in the competitive market need to be unique and attractive which is
possible by knowing needs and higher expectations of all the customers. The designing of good
products which satisfy the expectations of all the consumers is done by interacting personally
with the consumers.
The researcher need to give emphasis on the aim of the project which will be achieved by
using primary approach in which facts and gathered by individuals. Assumptions are set by the
researcher before conducting the research which further helps in getting important information.

Questionnaire will be used as direct weapon in order to collect important information as this help
in taking direct consent from all the consumers.
Cluster sampling is used by an individual in which different categories are assigned into
which data will be collected such as tastes and preferences, price of products, quality, budget
level set by customers.
1.3 Design questionnaire
Questionnaire
Name-
Gender
 Male
 Female
 Transgender
Age
 18-30 years old
 30-45 years old
 45-60 years old
 60+ years old
Do you visit to your nearby restaurants?
Yes No
How frequently you visit to a restaurant?
 Once a week
 Once in a month
 Rarely
 Never
Which of the following thing you consider while eating at restaurant?
 Quality
 Price
 Food quantity
 Service
Do you think ambience of the place influence your decision of visiting the restaurant?
Yes No
How much you spent on single visit to a restaurant?
 £10-£20
 £20-£40
 £40-£60
 £60-£100
Please give your opinion on the above discussion________________________

2.1 Summarize of data
Amou
nt
Spent
(£)
Number
of
custome
rs (f)
Mid-
value(
x) fx
Cumulati
ve
Frequenc
y (CF)
20-40 15 30 450 15
40-60 20 50
100
0 35
60-80 12 70 840 47
80-100 10 90 900 57
100-
120 18 110
198
0 75
120-
140 9 130
117
0 84
140-
160 7 150
105
0 91
160-
180 5 170 850 96
180-
200 4 190 760 100
Total 100
900
0
Mean= ∑Fx/∑F
=9000/100
=90
Median= 100/2= 50
Value of median lies in the class interval of 80- 100
Median= L1+ [(N/2-C)/F]*i (class size)
M= 80+ [(100/2-47)/10]*20
= 80+ [0.3]*20
=80+6= 86
L1= Lower limit of the class interval
N= number of frequency
C= preceding cumulative frequency of 80-100 interval

F= Frequency of 80-100 class interval
h= width of class interval
Mode- There is mode observed in the overall data value set
2.2 Analyze the results
Mean- Arithmetic mean is that important technique of measure of central tendency which is
simple average of overall set of data. This determines the trend of customer’s demands in the
restaurants in the London which would be helpful for existing owner in order to set up their new
restaurant in the same place. The mean of the above information reveals that 86 GBP usually
spent by a customers while visiting restaurants in the London which assure an individual in order
to achieve higher sales and the revenue in a particular year.
Median- This is another method which is widely used by an individual as a central tendency
measure (Rao and Tilt, 2015). This approach divides overall data set into two equal parts to
assure the owner in order to launch their firm to get higher expected returns in the future. Median
above this particular data set is £86 amounts spend by an individual normally in their single visit.
Mode- The value which repeats frequently in the whole data set with the help of mode approach
used in the measures of the central tendency. This determines the consistency of the amount of
expenditure spent by an individual while visiting the restaurants which enhances the overall
income to be earned by the owner in a particular year. Observation method has been used in
determine the actual values which has not been found in the given data set values.
2.3 Analyze data using measures of dispersion
Range- It is important approach used by the business in order to determine the actual amount to
be spent by an individual by visiting several restaurants in the London. The owner currently
operating in the same business wants to expand their existing market share by launching a new
branch of the current restaurant in the London. This is that technique of dispersion which
determines the difference between the highest and the lowest amount of expenditure spent by
consumers.
Range= Maximum value- lowest value
=200-20=180
Amoun
t Spent
(£)
Number
of
customers
(f)
Mid-
value(x) fx X^2 FX^2
20-40 15 30 450 900 202500
40-60 20 50
100
0 2500 1000000

60-80 12 70 840 4900 705600
80-100 10 90 900 8100 810000
100-120 18 110
198
0 12100 3920400
120-140 9 130
117
0 16900 1368900
140-160 7 150
105
0 22500 1102500
160-180 5 170 850 28900 722500
180-200 4 190 760 36100 577600
Total 100
900
0 132900 81000000
Variance (S^2) = ∑Fx^2 – ((∑Fx) ^ 2 /n)/ n – 1
=81000000-((9000) ^2/100)/100-1
=80991818
Standard Deviation= √ Variance
=√80991818
=8999.54
Interpretations
It is that technique of standard deviation which measures the changes takes places in form
of positive or negative variations in the values (Hwang and Yoon, 2012). Higher values of the
standard deviation depicts that it surpasses the values of mean and median that reflects the
overall trend in which amount spend by most of the consumers. In the current situation an entity
intends to open new restaurant in the London are required to satisfy the demands of all the
consumers in order to stay active in the market for long time. This current value is beneficial for
an enterprise as increase in the value is fruitful for the business.
2.4 Explain quartiles, percentiles and correlation
Amou
nt
Spent
(£)
Number
of
custome
rs (f)
Mid-
value(
x) fx
Cumulati
ve
Frequenc
y (CF)
20-40 15 30 450 15
40-60 20 50
100
0 35
60-80 12 70 840 47

80-100 10 90 900 57
100-
120 18 110
198
0 75
120-
140 9 130
117
0 84
140-
160 7 150
105
0 91
160-
180 5 170 850 96
180-
200 4 190 760 100
Total 100
900
0
Type of quartile Formula Figures
Lower quartile (Q1)
Q1 Q1 = ∑F/4 = 100/4
= 25
Q1 = L1 + (∑F/4 – C)/F * i = 40 + (25-15)/20*20
= 50
Upper quartile (Q3)
Q3 q3 = 3(∑F/4) = 3(100/4)
= 75
Q3 = L1+ [3(∑F/4)-C/F]* i = 100 + (75-57)/18*20
= 120
Percentiles Quartiles Values
25th percentile Lower quartile (Q1) 50
75th percentile Upper quartile (Q3) 120
Correlation- This technique is widely used in order to form adequate relationship between two
variable used by a researcher in their analysis. In the current case, the owner of restaurant will

take two variable such as sales and discounts offered to their customers in attracting wide
number of customers. It shows the perfect relationship between two variables in order to direct
its overall business in the future.
Sales (Units) Discounts (%)
20 1
40 4
50 6
55 6
60 10
70 12
80 13
90 14
100 15
Particulars Sales (Units) Discounts (%)
Sales (in Units) 1 0.97
Discounts (%) 0.97 1
Interpretation
Above mentioned data set has positive and perfect correlation among each other which
shows that with the help of offering discounts an individual will increase its overall sales units.

TASK 2
3.1 Producing graphs
Year 1 Year 2 Year 3 Year 4
0
100000
200000
300000
400000
500000
600000
100000
200000
300000
500000
50000 80000 110000 140000
Sales
Advertising
Interpretations
Column chart is one of a form of presentation of data which helps in creating relationship
among two variables such as sales and advertising. It shows direct relationship that increase in
the advertising expense will help in inducing the amount of the sales and the revenue. In the
above case, the increasing sales are due to the brand image of the firm in its external market the
amount of sales has increases from one year to another.
Year 1
Year 2
Year 3
Year 4
0 100000 200000 300000 400000 500000 600000
100000
200000
300000
500000
20000
60000
100000
140000
Profit
Sales
Interpretations

Bar chart is another form of presentation of data in which cause and effect relationship
has been shown from the above figure. This figure shows that sales and the profit incurred in an
entity have direct proportion to each other both these variable will affect each other. It has been
shown that the absolute amount of sales is higher as compared with the profit earned by the
business in a particular year.
0.5 1 1.5 2 2.5 3 3.5
0
50
100
150
200
250
Total Number of customers
Loyal customers
Interpretation
Scatter diagram shows the impact of one variable over other which indirectly affects the
overall aim of the business (Graham, Harvey and Puri, 2015). The main aim of the business
owner is to achieve higher market position by satisfying all of its existing and potential
customers. This figure shows the relationship between two of the components which runs on
parallel basis in order to improve the existing business entity’s performance. It also reveals that
total number of customers in all these locations is higher as compared with the trusted and loyal
customers retain with the existing business. The increasing numbers of customers will strengthen
the current business entity of the restaurant owner.

3.2 Trend line
Year 1 Year 2 Year 3 Year 4
0
100000
200000
300000
400000
500000
600000
f(x) = 113333.333333333 x
R² = 0.988034188034188
Sales
Linear (Sales)
Advertising
Interpretations
Trend line will act like a forecasting tool which helps in determining the sales of the
future year on the basis of existing trend running in the external market. This helps an individual
in order to predict their future sale which helps in improving the existing business by attracting
its variety of customers towards this entity. The above trend shows that the sales achieved by the
business are increasing from one period to another.
3.3 Business presentation
3.4 Business formal report
Formal business report
To
The managing director
Sub- Analysis of Business
Sir,
The restaurant owner needs to expand its existing business by opening new branch in the city
of London which is famous tourist destination in the whole world.
Research methodology
Primary collection of data will be used by an individual in which questionnaires will be
circulated among the variety of customers
Sampling
Random sampling will be used in which few samples will be selected out of the whole universe
of all the consumers
Conclusion
Information gathered by an individual will related to the business aims and the objectives in
order to achieve in a given time span

4.1 Information processing tools
Transaction processing-It is that tool which helps in improving the efficiency of the overall
business practices incurred in the existing business (Craft, 2013). The transactions incurred in
this firm will be processed in different forms such as batch processing in which whole set of
transactions are distributed into different batches. This reduces the overall time in the business in
order to deliver quality oriented output for the beneficial of the existing owner.
Management information system- The events occurred in the business comes in the touch of
the top management which helps in complying each and every rules framed by the business.
Budgets prepared by an entity will be sanctioned by authority which helps in improving the
existing firm of the restaurant.
4.2 Prepare project plan to determine critical path
Task Name Duration Start Finish Predecessors
Replace window in lounges 5 wks Fri 9/9/16 Thu 10/13/16
Rewiring 4 wks Fri 9/9/16 Thu 10/6/16
Re-plaster walls of lounges 2 wks Fri 10/14/16 Thu 10/27/16 1
Fit lights in lounges 1 wk Fri 10/7/16 Thu 10/13/16 2
Decorate bedrooms 5 wks Fri 10/7/16 Thu 11/10/16 2
Install plumbing 5 wks Fri 10/7/16 Thu 11/10/16 2
Decorate lounges 4 wks Fri 10/28/16 Thu 11/24/16 3,4
Decorate kitchens 3 wks Fri 11/11/16 Thu 12/1/16 6
Decorate 2 wks Fri 11/11/16 Thu 11/24/16 6

4.3 Using financial tool for decision making
Project
A PV @12%
Present
value
Project
B
PV
@12%
Present
value
Initial
investmen
t
20000
0
20000
0
1 50000
0.8928571
4
44642.857
1 90000
0.8928
6
80357.142
9
2 80000
0.7971938
8
63775.510
2
11000
0
0.7971
9
87691.326
5
3
13000
0
0.7117802
5
92531.432
2
15000
0
0.7117
8
106767.03
7
4
15000
0
0.6355180
8
95327.711
8
18000
0
0.6355
2
114393.25
4
5
25000
0
0.5674268
6
141856.71
4
21000
0
0.5674
3 119159.64
Total
438134.22
5 508368.4

NPV
238134.22
5 308368.4
Interpretation
Capital budgeting technique emphasizes on the profitability of the projects in which time
value concept has followed. The discounted rate has used to assess the cash flow generated by
the business enterprise over the life of whole project kept by the owner in its business. Hence,
Project B will be taken into consideration by an entity as this would help an entity in uplifting
their existing conditions of the organization.
Year
Project
A Project B
0
-
200000 -200000
1 50000 90000
2 80000 110000
3 130000 150000
4 150000 180000
5 250000 210000
IRR 42% 55%
Interpretation
IRR stands for internal rate of return which helps in assessing the viability of the project
as this generates that rate of return at which initial investment and the cash flow gets equal. The
rate of return higher than the internal cost of capital will be taken into account for producing
higher market results in the future (Boulay, 2015). In the current situation, Project B will be
selected as it has produced higher rate as compared to its competitor.
CONCLUSION
It can be concluded from the above assignment that decisions is essential in enhancing
the financial resources in the existing business enterprise. The data collected by an individual
will help the researcher using statistical measures. The projects viability are also assessed using
NPV and IRR which reveals that project B has selected by the firm.

REFERENCES
Books and journals
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Journal of Business Ethics. 117(2). pp.221-259.
Graham, J. R., Harvey, C. R. and Puri, M., 2015. Capital allocation and delegation of decision-
making authority within firms. Journal of Financial Economics. 115(3). pp.449-470.
Hwang, C. L. and Yoon, K., 2012. Multiple attribute decision making: methods and applications
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an empirical investigation. Journal of Small Business Strategy. 12(1), pp.80-90.
Kahraman, C., Onar, S. C. and Oztaysi, B., 2015. Fuzzy multicriteria decision-making: a
literature review. International Journal of Computational Intelligence Systems. 8(4).
pp.637-666.
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consumer financial decision making: The role of national culture. Journal of Marketing.
79(1). pp.44-63.
Rao, K. and Tilt, C., 2015. Board composition and corporate social responsibility: The role of
diversity, gender, strategy and decision making. Journal of Business Ethics. pp.1-21.
Welsh, D. H. and Birch, N. J., 2015. The ethical orientation of US small business decision
makers: A preliminary study. Journal of Small Business Strategy. 8(2). pp.41-52.
Online
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February 2017].