Business Decision Making Methods : PDF

Business Decision
Making

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Data collection sources and creation of plan.........................................................................1
1.2 Research methodologies and sample designing....................................................................2
1.3 Questionnaire designing........................................................................................................3
TASK 2............................................................................................................................................5
2.1: Creating data by summarising information with the help of representative value..............5
2.2: Analysis of data by collected from the research..................................................................7
2.3: Evaluating measure of dispersion........................................................................................8
2.4: Benefits of using quartile, percentile and coefficient correlation........................................9
TASK 3............................................................................................................................................9
3.1: Various graphs and charts....................................................................................................9
3.2: Trend line...........................................................................................................................14
3.3: Covered in PPT..................................................................................................................15
TASK 4..........................................................................................................................................16
4.1: Use of data methods in decision making...........................................................................16
4.2: Critical path........................................................................................................................16
4.3: Investment appraisal tools..................................................................................................18
CONCLUSION..............................................................................................................................18
REFERENCES..............................................................................................................................20

INTRODUCTION
Decision making is important aspect which helps in selection of the best alternative from
large number of choices. In organisational context, it helps in to identify the most profitable part
of organisation and reduction of unnecessary expenses through providing more emphasis on such
activities. Research is such factor which contributes their effort in improvement of decision-
making. This would helps in collection of large number of information through application of
primary and secondary methods of data collection. Appropriate results and conclusions are
gathered by the organisation through adoption of different statistical and accounting methods.
Food for Friends is restaurant which which operates their business activities in London with the
aim of expanding new branch in London (Aharoni, Tihanyi and Connelly, 2011).
In the present report explain about, application of primary and secondary method for
creation of plan, designing of survey methodologies and sample framing, formulation of
questionnaire for business issues, interpretation of data with the helps of the methods like mean,
median, mode, correlation coefficient etc. Also, presentation of the results with the help of
graphs and pie charts, trend lines are used to assess the future growth of restaurant and
application of the information and financial tools to take better decisions.
TASK 1
1.1 Data collection sources and creation of plan
For ascertaining the viability of move regarding expansion of operations and opening of
new branch in London, views of respondents and market information are required to gathered. In
this regard, main role is played by the research activities which includes the use of different
method to collection information from different sources. There are two method which are
majorly used to collect the information which are known as primary and secondary methods.
Primary method is used to gather the views of respondents and secondary method is used to
collect information from the market which is in published form in different sources. It provides
the opportunity to the management of Food for Friends is to accomplish their objectives within
given frame of time and provide services as per their needs to improve sales and profitability.
Primary sources: This method is used to collect the first hand information from the
respondents. Here, respondents provides their on views and feedbacks on different aspects which
are asked to them. The information which is collected from the use of different tools which
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comes under primary method is true and correct in nature and free from bias. So, the results
which are gathered from analysis of the information is accurate. The different tools which are
comes under includes interview, questionnaire, online etc. which re defined below:
Interview: This method includes collection of information through getting face to face
interaction with respondents. It helps to gather the information through analyse their gestures and
behaviour also.
Questionnaire: It includes formulation of questions are are further asked to respondents
to ascertain their views in form of answers (Ferrell and Fraedrich, 2015).
Online: This includes use of digital platform to collect information like websites, online
poll etc.
Secondary method: It is used to collect the second hand information which is contained
by different sources like articles, magazines and newspapers etc. All the information is not
directly related to research topic but gathered in less period of time.
1.2 Research methodologies and sample designing
Food for Friends is a restaurant which provides various kind of dishes to attract the large
number of customers and satisfy their different requirements. The main aim of the management
of restaurant is to open new branch in London for expand their operations and capture large
market share. In this regard, need to conduct research which helps to take informed decisions
which provides the opportunity is to higher number of results. To perform their research
activities in effective manner need to outline the design which guides in researcher to perform
functions in effective manner to achieve desired results.
Survey methodologies: This includes about the determination of the method is used
regarding collection of information. To carry out their research activities in effective manner,
researcher of Food for Friends is decided to use questionnaire tool under primary method. Here,
close-ended questionnaire is prepared which contains 10 different questions attached with the
answers from the one is selected as per their choice by the respondents. It helps to know the
viability of their move about opening of new branch in London and ascertain desired results.
Sample framework: Here the procedure is started regarding selection of the respondents
from total population. There are many method are present such as cluster, stratifies and random.
Due to having the limited period of time the researcher of Food for Friends decided to use
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random sampling method to select 60 respondents from total population to ask the research
questions which are framed while preparing questionnaire.
In the present reports information is gathered regarding:
 Existing performance of Food for Friends
 Viability of move of opening new branch in London
 Pricing policies
1.3 Questionnaire designing
Questionnaire: It is a document which contains the list of different questions which are
prepared to carry on research functions. The questions which are included in questionnaire helps
to attain the views of respondents. The main objective behind the formulation of questionnaire is
to gather information, data should be in the comparable form, collection of true information
which is less biased in nature and collect information about different aspects (Groebner and et.
al., 2011).
It is further classified into two types which are called as open-ended and close-ended.
Open-ended questionnaire includes same research questions but provides the opportunity to the
respondents is to frame their own answer. On other hand, close-ended questionnaire carry
answers with research question from which respondent is required to select one as per their view.
Questionnaire
Name
Age
Gender
Q1. Opening of new branch Food for Friends in London is viable move?
 Yes
 No
 Cant say
Q2. Which location is most preferable to open new branch of restaurant in London?
 Near tourist places
 Countryside
 In main city
Q3. Does expansion of business activities is beneficial for Food for friends in future?
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 Yes
 No
 Cant say
Q4. What attracts you most towards Food for Friends?
 Fast services
 Multiple cuisine
 Interior
Q5. Do you satisfied with the current functioning of Food for Friends in market?
 Highly satisfied
 Moderate
 Dissatisfied
Q6. Do you think Food for Friends need to bring changes in their pricing policies?
 Yes
 No
 Cant say
Q7. Is there is any need to add new dish by Food for Friends in their offerings?
 Breakfast
 Main course
 Cant say
Q8. How often you visit Food for Friends in a month?
 Once
 Twice
 Thrice
Q9. Does expansion of restaurant helps to improve profitability Food for Friends?
 Agree
 Disagree
 Cant say
Q10. What you want to recommend to Food for Friends for effectively accomplishment of
desired objectives?
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TASK 2
2.1: Creating data by summarising information with the help of representative value
Q1. Opening of new branch Food for Friends in London is viable move?
Particulars
No. of
respondents
Yes 30
No 20
Cant say 10
Total 60
Mean 20
Median 20
Mode 0
Q2. Which location is most preferable to open new branch of restaurant in London?
Particulars
No. of
respondents
Near tourist
places 20
Countryside 12
In main city 28
Total 60
Mean 20
Median 20
Mode 20
Q3. Does expansion of business activities is beneficial for Food for friends in future?
Particulars
No. of
respondents
Yes 29
No 18
Cant say 13
Total 60
5

Mean 20
Median 18
Mode 3
Q4. What attracts you most towards Food for Friends?
Particulars
No. of
respondents
Fast services 19
Multiple
cuisine 27
Interior 14
Total 60
Mean 20
Median 19
Mode 5
Q5. Do you satisfied with the current functioning of Food for Friends in market?
Particulars
No. of
respondents
Highly
satisfied 18
Moderate 27
Dissatisfied 15
Total 60
Mean 20
Median 18
Mode 3
Q6. Do you think Food for Friends need to bring changes in their pricing policies?
Particulars
No. of
respondents
Yes 32
6

No 13
Cant say 15
Total 60
Mean 20
Median 15
Mode 2
Q7. Is there is any need to add new dish by Food for Friends in their offMean, Median, Mode
and Range. 2017erings?
Particulars
No. of
respondents
Breakfast 18
Main course 31
Cant say 11
Total 60
Mean 20
Median 18
Mode 7
Q8. How often you visit Food for Friends in a month?
Particulars
No. of
respondents
Once 29
Twice 22
Thrice 9
Total 60
Mean 20
Median 22
Mode 2
Q9. Does expansion of restaurant helps to improve profitability Food for Friends?
Particulars
No. of
respondents
Agree 35
7

Disagree 18
Cant say 7
Total 60
Mean 20
Median 18
Mode 0
2.2: Analysis of data by collected from the research
Year Sales Net Profit
2008 3200 1150
2009 3300 1290
2010 3800 1450
2011 4100 1500
2012 4900 1650
2013 5500 1800
2014 5900 1950
2015 6150 2100
2016 6350 2200
2017 6500 2450
Mean 4970 1754
Median 5200 1725
Mode 3200 1150
Mean: It is refers as the process of calculating average of the figures which are present in
a series. The mean of sales and net profit from the above given series is calculated as 4970 and
1754.
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Median: This will includes about calculation of middle value which is present in a series.
The different methods are applied in the case of even and odd number of present in a series. The
median of sales and net profit is 5200 and 1725 (Mean, Median, Mode and Range. 2017).
Mode: It is the number which present of the times in as series. The mode of sales and net
profit is 3200 and 1150 (Levy, 2015).
2.3: Evaluating measure of dispersion
Year Sales Net Profit
2008 3200 1150
2009 3300 1290
2010 3800 1450
2011 4100 1500
2012 4900 1650
2013 5500 1800
2014 5900 1950
2015 6150 2100
2016 6350 2200
2017 6500 2450
Minimum 3200 1150
Maximum 6500 2450
Standard
deviation
1283.91761
59102
420.507629
7366
Correlation
coefficient
0.97203698
27
Range: It is the method which includes calculation of minimum and maximum figures
from the above mentioned series of sales and net profit to interpret important results through its
comparison. The minimum range of sales and net profit is 3200 and 1150. The maximum range
of sales and net profit is 6500 and 2450.
Standard deviation: This method used by the management of Food for Friends to
identify the risks which are associated with their objective of opening new branch in London. It
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helps to optimally utilise their given resources to attain maximum results. The standard deviation
of sales and net profit is 1283.9176159102 and 420.5076297366.
2.4: Benefits of using quartile, percentile and coefficient correlation
Quartile: It is a type of quantile where Q1 is mid number between smallest and median
of series. Q2 is median and Q3 is Mid number between median and highest value of series.
Percentile: This includes conversion of results in percentage form to get effective
conclusion through its comparison with other results. It improves decision making of manager.
Coefficient correlation: This includes identification of relation between two variables to
understand their impact upon each other (Pettigrew, 2014).
TASK 3
3.1: Various graphs and charts
Q1. Opening of new branch Food for Friends
in London is viable move?
Frequency
Yes 30
No 20
Cant say 10
10
Yes No Cant say
0
5
10
15
20
25
30
35 30
20
10
Column B

Q2. Which location is most preferable to open
new branch of restaurant in London?
Frequency
Near tourist places 20
Countryside 12
In main city 28
Q3. Does expansion of business activities is Frequency
11
Near tourist places Countryside In main city
0
5
10
15
20
25
30
20
12
28
Column B

beneficial for Food for friends in future?
Yes 29
No 18
Cant say 13
Q4. What attracts you most towards Food for
Friends?
Frequency
Fast services 19
Multiple cuisine 27
Interior 14
12
29
18
13
Yes
No
Cant say

Q5. Do you satisfied with the current
functioning of Food for Friends in market?
Frequency
Highly satisfied 18
Moderate 27
Dissatisfied 15
13
19
27
14
Fast services
Multiple cuisine
Interior

Q6. Do you think Food for Friends need to
bring changes in their pricing policies?
Frequency
Yes 32
No 13
Cant say 15
14
Highly satisfied Moderate Dissatisfied
0
5
10
15
20
25
30
18
27
15
Column B

Q7. Is there is any need to add new dish by
Food for Friends in their offerings?
Frequency
Breakfast 18
Main course 31
Cant say 11
15
32
13
15
Yes
No
Cant say

Q8. How often you visit Food for Friends in a
month?
Frequency
Once 29
Twice 22
Thrice 9
16
Breakfast Main course Cant say
0
5
10
15
20
25
30
35
18
31
11 Column B

Q9. Does expansion of restaurant helps to
improve profitability Food for Friends?
Frequency
Agree 35
Disagree 18
Cant say 7
17
29
22
9
Once
Twice
Thrice

3.2: Trend line
Trend line: It is considered as straight or curved line which indicates the pattern or
direction of the time series data. The information which is presented by trend line is in the
sequence over the period of time (Yager and Kacprzyk, 2012). It is a line which is draw visually
which connects the actual data which is shown over the series through using statistical
techniques such as exponential smoothing and moving averages. This method helps to assess the
future activities which provides the opportunity is to make better plans through which they can
accomplish their objectives (Schmoldt and et. al., 2013).
Year Sales Net Profit
2017 6500 2450
2018 6750 2900
2019 7500 3100
2020 7950 3450
18
Agree Disagree Cant say
0
5
10
15
20
25
30
35
40 35
18
7
Column B

1 2 3 4
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
2017 2018 2019 2020
6500 6750 7500 7950
2450 2900 3100 3450
Column A
Linear (Column A)
Column B
Linear (Column B)
Column C
Linear (Column C)
It is assess from the above trend line graph chart that sales and net profit of the Food for
Friends is increased with continuous rate in future period of time. This shows customers are
satisfied with the existing services of the restaurants and opening of the new branch of restaurant
in London is viable move which provides success in their business functions (Zolfani and et. al.,
2013).
3.3: Covered in PPT
3.4: Formal report
To
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Restaurant Managers
Date: 7th May, 2018
Subject: “To collect the views of respondents about the opening of new branch of Food for
Friends in London”
Introduction
Food for Friends is a restaurant operates their functions In London to earn large number
of profits through satisfaction of the different requirements of customers. They also want to
open new branch to improve market share. In this regard, they conduct research to ascertain the
viability of their move and preferences of customers.
Methodologies
Through use of primary method questionnaire is prepared which contains 10 questions
and random sampling method is used to select 60 respondents.
Findings
It is identify from the above research that respondents are satisfied with the existing
services of Food for Friends and opening of new branch helps to earn large number of profits
and capture large market share.
Conclusion
It has been concluded from the above report that large number of benefits are derived by
restaurant through expansion of business activities such as high customer base, high
profitability etc.
TASK 4
4.1: Use of data methods in decision making
Huge role is played by information processing tools like DSS, MIS and TPS to provide
the correct and reliable information within the different processes of organisation for
improvement of their actual performance. All these activities bring coordination among the
different functions through improvement of their understanding. This is implement by the Food
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for Friends restaurant to improve the process of transferring of information effectively. The role
these different systems within restaurant is defined below:
MIS: It is hardware or software system which helps to collect, process, store and
transferring of information to assist the manager of restaurant in decision-making process. It
helps to improve business value and profits (Shapiro and Stefkovich, 2016).
DSS: It is interactive software which helps the manager of restaurant is to compile the
information from various sources like raw data, documents, personal knowledge or business
models to determine different issues and makes appropriate solutions.
TPS: it is effective system in the form of computer hardware or software which is known
as transaction oriented application. It provides the opportunity to the restaurant is to perform
daily functions in effective manner which are important part of their business (Xu, 2015).
4.2: Critical path
Critical path: It is refers as an algorithm which provides the information regarding the
set of activities which are involved in the process of performing project. The different paths
which are necessary to perform for accomplishment of the desired project is evolved with this
method along with the time period. It provides the opportunity is to assess the total time period
which is required to complete the project. The provision of this method provides that need to
give more emphasis on the longest sequence of activities which helps to complete the whole
project within stipulated period of time. It enhance the decision making about selection of path
which is important for project.
Name of
activity Time period Predecessors
Nature of
market 3 days 0
Location for the
restaurant 5 days 1
Investment plan 5 days 1
Rate of return 4 days 3
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on investment
Target market 8 days 1, 2
Advertisement 10 days 5
Lay out for
decision 3 days 6
Path A: 1,2,5,6,7 = 3+5+8+10+3= 29 Days
Path B: 1,3,4=3+5+4= 12 Days
Path c: 1,5,6,7=3+8+10+3= 24 Days
It is observed from the above network diagram that the longest which is evolved in the
process of project is path A which takes almost 29 days to complete. So, it is important to choose
this path first while performing their job on the project because of delay of one day impacts the
completion time period of whole project. This will provides the opportunity is to accomplish
their desired targets within stipulated period of time (Sinha and Labi, 2011).
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4.3: Investment appraisal tools
Particular Project
Discounting
factor Discounted cash inflow
Year
Cash
Flow 12.00% Present Value
0 -190000 1 -190000
1 50000 0.893 44645
2 64000 0.797 51020.8
3 58000 0.712 41284.4
4 70000 0.636 44485
Total P.V 181435.2
Initial investment
of year -190000
NPV -8564.8
IRR 9.94%
It is interpreted from the above calculation that as per the NPV the project is not
acceptable because it shows the negative value of 8564.8 which means the investment made in
the project is not recovered in the 4 years of time period. On the other hand, through application
of the method of IRR the percentage of return is 9.94% which means after the completion of 4
years the return should be availed with 9.94% (Tufféry, 2011).
CONCLUSION
It has been concluded from the above report that research helps the Food for Friends to
improve their decision making an check the viability of their move regarding opening of new
branch in London. Primary method is used and close-ended questionnaire is prepared related to
research topics and issues to gather the actual views of respondents. This will provides the
opportunity is to bring change in their cuisines and services according to current trends and their
preferences. Statistical methods are used to collect important results from the past information
and which is collected from market at present time. Financial tool like NPV and IRR helps to
asses the profitability which is associated with the projects and improves decision making
regarding selection of project.
Mean, Median, Mode and Range. 2017
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