Evaluation and Selection of Projects Using Information Processing Tools

The assignment discusses various information processing tools, network diagrams, and project evaluation methods used by managers to make business decisions. The first tool is the Management Information System (MIS), which provides daily data and insights to support middle-level management decision-making. The Decisions Support System (DSS) is used by top-level managers to generate strategic and tactical business decisions. Transaction Processing Systems (TPS) are used to control costs and make decisions on cost reduction strategies. A Network Diagram, also known as a Gantt chart, is a visual tool that helps project managers determine the sequence of activities and execute projects efficiently. Finally, two project evaluation methods, Net Present Value (NPV) and Internal Rate of Return (IRR), are discussed to help evaluate the viability of a specific project.

BUSINESS DECISION MAKING

INTRODUCTION
Business environment is uncertain and it makes problems more complicated for the
business firms. Managers often find it difficult to understand the situation in proper manner. Due
to this reason they sometimes find it difficult to make business decisions. In this report, statistical
tools are applied on cash flows and results are interpreted. In middle part of the report, charting
of collected primary data is done formal business report is presented. At end of the report,
network diagram is prepared and critical path is identified for the project. Along with this,
project evaluation methods are applied on cash flows and viability of project is measured.
TASK 1
1.1Collection of primary and secondary data
Business problems come in existence for the business firm on continuous basis. It is very
important to identify their solution. Sometimes business problems are so big and it is very
difficult to solve them. When such kind of problems comes in existence business firms use
research as a tool to identify the root cause of the problem and its solution (Siegel, Miller and
Jemal, 2015). Research is conducted by following a specific approach under which primary and
secondary data is gathered by an individual. It is assumed that one must develop broad
understanding about the research topic. It is the broad understanding which helps one in carrying
out its entire research work in a right direction. In order to comprehend research topic in proper
manner one collect secondary data. It is the set of figures that are already collected by someone
and is taken by reviewing various articles from books, journals and magazines. On other hand,
primary research is also conducted by an individual (Difference between primary and secondary
research, 2016). This is because in this fresh data that is related to the current time period is
gathered by an individual. Secondary data help one in understanding past but primary data help
one in comprehending current scenario. Hence, there is a importance of both sort of data. In the
present research primary data will be gathered by distributing questionnaire among 60
respondents that are living in different areas of London.

1.2Survey methodology and sampling methods
In order to conduct a research sample of 60 respondents will be taken. It is very important to
collect sample units from population in proper manner. There are some specific sampling
methods that are used in the research. Some of them are explained below.
 Simple random sampling: It is the method of sampling in which one at his will without
setting any benchmark pick up units for the sample from huge group of the people.
Mentioned sort of approach is commonly used when research results that one wants to
obtain can be received from any sort of people (Cressie, 2015). This approach cannot be
used in current study because main target is to measure overall consumer behavior of the
people.
 Stratified sampling methods: This sampling method is quite different in comparison to
previous one. This is because in this sampling method only by using certain benchmarks
classify entire population in to multiple parts. From these parts units for entire sample is
taken by the researchers. This method is appropriate for the current research study
because it is very important to track consumer’s behaviors that are different from each
other. Hence, by using this method sample units will be taken from the population.
 Cluster sampling: It is another sampling method under which entire geographic area is
divided in to varied parts. Entire units for sample are picked up from these different
geographic parts. This approach is widely employed in the researches that are carried out
by the government.
 Convenience sampling: Under this method one like simple random sampling method at
its will take sample units from the population. This method is also commonly used by the
business firms.
1.3Questionnaire for research
Name...
Age....
Income....
1. What is your frequency of arrival in the restaurant for taking a meal?
 1-2 ( )
 3-4 ( )
 5-6 ( )

 More than 6 times ( )
2. Quality of service is good at Murano restaurant?
 Strongly agree ()
 Agree ()
 Neutral ()
 Disagree ()
 Strongly disagree ()
3. Which of these factors you highly considered while selecting any restaurant.
 Atmosphere ( )
 Closeness to house ( )
 Price of dishes ( )
 Cleanness ( )
4. Interior attract people, towards restaurant?
 Yes ()
 No ()
5. What characteristics you like to see in the item that you ordered at any restaurant?
 Highly spiced ()
 Healthier ()
 Both ()
6. Within 15 minutes dish you order is available to you on table at Murano restaurant?
 Agree ( )
 Strongly agree ( )
 Neutral ( )
 Disagree ( )
 Strongly disagree ( )
7.Workforce of the mentioned restaurant is very cooperative in nature?
 Agree ( )
 Strongly agree ( )
 Neutral ( )
 Disagree ( )

 Strongly disagree ( )
8. In your opinion from which of these restaurants tough competition is received by Murano
restaurant?
 Balti palace ()
 Blackfriars restaurant ()
 Food for friends ()
9. Restaurant charge high amount for its product at the workplace?
 Strongly agree ()
 Agree ()
 Neutral ()
 Disagree ()
 Strongly disagree ()
TASK 2
2.1 Descriptive statistics
Table 1 Calculation of mean, median and mode
1 20000
2 27000
3 35000
4 43000
5 50000
Mean 35000
Median 35000
Mode #N/A
 Mean: It is the method that is used to measure mean value of the variable. By using this
tool one comes to know about the value at which most of times other values of the
variables were in the data set. On the basis of mean value one come to know about the
performance that is given by the variable most of times in respect to the business firm
(Cramér, 2016). It can be assumed that there is a huge significance of the mean as
statistical tool.

 Median: It is integral part of the descriptive statistics because it is the tool that is used to
break down set of figures in to the multiple parts. This tool facilitates analysis of large
data set in easy and effective manner. This is the reason due to which median is
commonly used by data analyst to analyze the variable.
 Mode: Many times in the set of figures single value repeats number of times and
indicates the specific trend (Anderberg, 2014). It is the mode that is used to identify that
single variable. Thus, by using mode one can identify trend that was in respect to variable
in earlier time period.
2.2 Analysis of data
 Mean: Value of mean is 35000 and it means that on average basis firm made a sale of
35000 in its business. From the table that is given above it can be observed that sales
value for the last year is higher than average value. This clearly reflects that current
performance of the business firm is excellent and it is performing well in its business.
 Median: Median is another important tool and its value is 35000. Entire set of figures is
classified in to two parts on the basis of the median value. It can be observed that sales
value is growing at much fast pace above the median value. But growth rate declined
after median value. This means that sales are increasing on year on year basis but its
growth rate gets declined.
 Mode: In the set of figures there is no value which is repeating again and again and due
to this reason there is no value of mode.
2.3 Measures of dispersion
Table 2 Calculation of standard deviation
1 20000
2 27000
3 35000
4 43000
5 50000
STDEV 12020.82
I
n

t
e
r
p
r
e
t
a
t
i
o
n
Standard deviation is the tool which reflects the gap that is existing between the average
value and current value of the variable (Mardia, 2014). It can be seen that value of standard
deviation is 12,020 and this means that there is huge gap between mean value and current value
of the variable. Higher standard deviation is assumed good for the business firm is analyzed
variable is sales. Hence, it can be said that firm give fabulous performance in its business and
same must be continued.
2.4 Calculation of quartile and correlation
Table 3 Calculation of quartile and standard deviation
1 20000
2 27000
3 35000
4 43000
5 50000
Correlation 1
Q1 27000
Q2 35000
Q3 43000
Interpretation
Correlation is statistical tool which help one in identifying the relationship that exists between the
variables. It must be noted that correlation always lie in limit of -1,0 and +1. In case correlation value is
negative then it is assumed that both variables are opposite of each other vice verse. In the table that is
given above it can be seen that correlation value is 1 and this means that sales and profit of the firm are to

great extent interlinked to each other (Benjamin and Cornell, 2014). This means that in case sales will
get changed by 20% equivalent percentage will come in the profit of the firm. On other hand, there is
another statistical tool which is quartile which classifies data in to three parts. It can be seen from the
table that value of quartile is increasing consistently from 27000 to 43000. This means that sales of the
Murano restaurant is enhancing regularly.
TASK 3
3.1 Charting of data
Quality of service is good at Murano restaurant?
Strongly agree 30
Agree 10
Neutral 5
Disagree 13
Strongly
disagree 2
30
10
5
13
2
Strongly agree
Agree
Neutral
Disagree
Strongly disagree
Figure 1People opinion on quality of service
Interpretation
It can be seen from the table that in respect to quality of service there are 30 respondents
out of 60 who think that firm is providing excellent quality service to the people. Apart from this,
there are 10 respondents who are agreeing on same statement. Apart from this, there are 5
respondents who are neutral on same statement. 13 respondents are disagreeing and 2 are strong

disagree on same statement. Hence, it can be said that most of the people have an opinion that
good quality of service is provided to them by the people.
Which of these factors you highly considered while selecting any restaurant.
Atmosphere 10
Closeness to
house 20
Price of dishes 20
Cleanness 10
Atmosphere Closeness to
house Price of dishes Cleanness
0
5
10
15
20
25
10
20 20
10 Series1
Figure 2 People response on the factor which mostly influence their purchase decision
Interpretation
It can be seen from the table that there are 10 out of 60 who think that good atmosphere
in the restaurant is the factor that influence their purchase decisions. There are 20 respondents
who think that closeness to house is the factor that affects their decision in respect to selection of
restaurant. Same number of people think that it is the price factor that affects their choice for
restaurant. There are only 10 respondents who state that they give due importance to the clean
factor in selection of any restaurant.

3.2 Trend
analysis chart
Figure 3 Trend analysis chart
Interpretation
Trend analysis chart reflects that sales of the firm are increasing regularly. In future also
it will increase regularly. As trend line is moving upward and this strongly signals that in
upcoming time period sales of the firm will increase. Trend analysis is used on large scale to
make prediction in respect to the business firms. It can be observed that there are certain merits
and demerits of the time series method (Bickel and Doksum, 2015). Main merit of this method is
that if past condition comes in existence in future time period than in that case prediction made
by the trend analysis chart is highly reliable. Contrary to this, the main demerit of trend analysis
method is that it make use of past year data in order to make prediction. If past trends will not
repeat again then prediction made by trend analysis chart will not prove correct. Hence, along
with using trend analysis method one must also use simulation approach. By using this approach
in different situations likelihood of happening of certain event can be measured. Hence, both
trend analysis and simulation method must be used to make prediction.
3.3 Covered in PPT
3.4 Formal business report
To
The Directors of the Murano restaurant Date: 18 th
1 2 3 4 5
0
10000
20000
30000
40000
50000
60000
f(x) = 7600 x + 12200
Series1
Linear (Series1)

December 2016
Subject: Business performance
Sir/Mam
Introduction
Current report is prepared on the Murano business performance and opinion as well as consumer
behavior of the people. In this regard primary data is collected and its results are interpreted.
Along with this, in the report descriptive statistics is applied on the data and its results are
interpreted in proper manner.
Research methodology
In the present research sample of 60 people is taken and in this regard stratified random sampling
method is used in the present research. Thematic analysis method is used to analyze the primary
data.
Data analysis
On the basis of analysis of data it is identified that firm give good performance in its business.
However, it needs to improve its business performance. It is also identified that people are price
conscious and they are giving due importance to the price of the product.
Conclusion and recommendation
It is concluded that slowdown comes in the growth rate of revenue and price factor is playing a
very important role in selection of restaurant from people side. Hence, it is recommend that firm
must lower down price of its product in order to attract large number of customers and to
accelerate growth rate of revenue.
TASK 4
4.1 Information processing tools
 Management information system: This system is used to make business decisions at
middle level of the management. In this information system on daily basis information
are recorded and processed. Same is used to make business decisions. Hence, there is a
great use of this information system.
 Decisions support system: Mentioned information system is used by the managers that
are operating at top of hierarchy in the firm (Bland, 2015). They make strategic and

tactical business decisions on the basis of output information that is generated by the
DSS. Thus, this information system is used by most of managers at the workplace.
 Transaction processing system: In order to make decisions in respect to cost curtailment
TPS is used at the workplace. On the basis of output generated by TPS strategy in respect
to controlling elevation in cost is formed by the managers of the business firm.
4.2 Network diagram
Figure 4 GANTT chart
Figure 5Network diagram
Interpretation

Network diagram is the one of the most important method which is used by the managers
to make business decisions. In this method the way in which project will be executed is
determined. By using specific approach order of activities is determined in the critical path
method. All activities that are related to project are performed in the sequence that is reflected by
the network diagram. If project will be performed by following sequence 1+5+8+9+10 then it
will be completed at minimum cost and on time. Contrary to this, if sequence that is revealed in
the chart will not be followed then project cost will increase at rapid pace (Gravetter and
Wallnau, 2016). In present case order of tasks of project will be 1+5+8+9+10 and it means that
which means that project will be executed in the 22 days.
4.3 Project evaluation method
Table 1: Calculation of NPV
Year Cash inflow (£)
Discounting factor
@12%
Discounted
cash inflow (£)
1 50000 0.893 44650
2 64000 0.797 51008
3 58000 0.712 41296
4 70000 0.636 44520
Total discounted cash inflow 181474
Less: Initial investment 190000
NPV (Total discounted cash
inflow – initial investment) -8526
Interpretation
NPV is the one of the most important method that is used to evaluate the specific project.
In this table it can be seen that NPV of the project at 12% discount rate is -8526 which means
that project is not viable for the firm. The main merit of NPV method is that concept of present
value is used to measure viability of project. On other hand, demerit of this method is that it does
not reveal the duration after which profit can be gained on the project.
Table 1: Calculation of IRR

Year Cash inflow (£)
Initial investment -190000
1 50000
2 64000
3 58000
4 70000
IRR 9.94%
Interpretation
IRR is the another project evaluation method that is used at large scale by the project
managers to measure the viability of project (Ferguson, 2014) . It can be observed that IRR of
project is only 9.94%. This is the insufficient return that project will give to the investor if
investment will be made. Hence, it can be assumed that mentioned project is not profitable for
the business firm. The main merit of this method is that present value is used to do calculation.
Only demerit of this approach is that calculation procedure is tough and every one cannot make
use of this method in easy way.
CONCLUSION
On the basis of above discussion it is concluded that business firms lots of problem in
there business. Managers must use statistical tool in order to make business decisions. By using
same reliable decisions can be made by the managers. It is also concluded that project must be
selected only on the basis of results of the project evaluation method. Most profitable project can
be selected by the business firm by using project evaluation method.