Business Statistics and Project Evaluation

This assignment delves into the role of statistics in business problem-solving. It examines the use of mean, median, mode, and trend analysis for data interpretation. The core focus is on project evaluation, specifically employing the Internal Rate of Return (IRR) method to assess project profitability. The assignment concludes by highlighting the importance of statistical tools in informed business decision-making.

BUSINESS DECISION
MAKING

TABLE OF CONTENTS
INTRODUCTION.......................................................................................................................................3
TASK 1.......................................................................................................................................................3
1.1 Plan for collection of data..................................................................................................................3
1.2 Sampling methods and survey methodology of research..................................................................4
1.3 Questionnaire for research................................................................................................................4
TASK 2.......................................................................................................................................................6
2.1 Statistical tools for analysis of data...................................................................................................6
2.2 Analysis of data..................................................................................................................................7
2.3 Measures of dispersion......................................................................................................................8
TASK 3.......................................................................................................................................................9
3.1 Producing graph................................................................................................................................9
3.2 Trend analysis chart.........................................................................................................................11
3.3 Covered in PPT.................................................................................................................................11
3.4 Formal business report....................................................................................................................11
TASK 4........................................................................................................................................................12
4.1 Information processing tools...........................................................................................................12
4.2 Network diagram.............................................................................................................................13
4.3 Project evaluation method..............................................................................................................14
CONCLUSION.........................................................................................................................................15
REFERENCES..........................................................................................................................................16
Figure 1Frequency of eating food in the restaurant...................................................................................10
Figure 2 Quality of services.......................................................................................................................11
Figure 3Trend analysis chart.....................................................................................................................12
Figure 4GANTT chart...............................................................................................................................14
Figure 5Network diagram..........................................................................................................................14
Figure 6Calculation of NPV......................................................................................................................15
Figure 7Calculation of IRR.......................................................................................................................16
Table 1 Descriptive statistics on data...........................................................................................................8
Table 2Calcualtion of standard deviation..................................................................................................10
Table 3 Calculation of correlation and quartile..........................................................................................10
Table 4Frequency of eating food in the restaurant.....................................................................................11

Table 5Quality of services.........................................................................................................................12

INTRODUCTION
Statistics is the one of the important area in which currently boom is observed. Analytics
industry is growing at rapid rate in terms of size and more and more firms are using analytics to
identify solution of the problem. In the current report, detailed research plan is prepared and in
respect to same research methodology and sampling frame is explained in detail. In the middle
part of the report, trend analysis is done and along with this primary data is analyzed. Apart from
this, formal business report is prepared. At end of the report, project evaluation method is used to
select most viable project for the business firm. In this way, entire research work is carried out
in the report.
TASK 1
1.1 Plan for collection of data
Research is the one of the important tool that is used by the business firms to explore detail
information in respect to specific research subject. In current time period competition is
increasing at rapid pace and due to this reasons it become very difficult for the firms to maintain
stable position in the market. Thus, it becomes important to conduct research so that solution of
business problems can be identified in order to improve business performance. In the current
report analysis of data related to restaurant will be done. In the current time period competitors
number is increasing at fast speed and due to this reason it become difficult for already
established restaurants to maintain their old position in the market (Lock and et.al., 2013). Thus,
it becomes very important for the restaurants to evaluate the current position so that steps in
order to improve performance can be taken on time. In this regard research is carried out and in
this regard primary and secondary data is gathered.
Secondary data will be gathered from the books, journals and magazines. Apart from this,
primary data will be collected by distributing questionnaire among the sample units. It can be
said that collection and analysis of both sort of data will ensured that useful results will be
obtained that will help firm in formulating business strategy for growth. In the current research
secondary data will be gathered from reliable journals and books. Journals will be selected by
considering the lectures and authors that are famous in their domain. By doing so it will be

ensured that from relevant journals data will be gathered. This data which is gathered from
Journal will be analyzed deeply and same will be source of information in present research study.
In the present research study data will be gathered from sample of 50 people will be taken
in the present research. By analysis of data results will be obtained and in this way research will
be carried out. Sample units will be taken from the population by selecting appropriate sample
units from the population.
1.2 Sampling methods and survey methodology of research
It is very important to determine the methodology that will be followed to conduct the
survey. Sample of 50 people will be taken from the group that resides in the specific geographic
area. There are number of ways in which sample can be extracted from the population. Some of
them are explained below.
 Simple random sampling: Simple random sampling is the approach under which in
systematic manner by following a particular procedure units of sample are extracted from
the population (Ranyard, Fildes and Hu, 2015). Usually, in the mentioned approach
research analyst without giving due importance to any factor pick sample unit from group
of people. This method is used on large scale in number of research studies.
 Stratified sampling: Stratified random sampling method along with simple random
sampling is used at large scale in the research industry. This method is quite unique and
different from the above mentioned method. This is because in these method
demographic features like income, age and religion as well as other factors are taken in to
account to pick sample units from the population. In the present study currently
discussed method can be selected because by employing same in the research in proper
manner data for research can be gathered.
 Convenience sampling: Convenience sampling is the one of the method that has high
degree of similarity with simple random sampling approach (King, 2015). This is because
in this approach also one by considering safety limit can take any individual in any way
as sample unit in the research.
 Cluster sampling: In this approach area like London or any borough is classified in to
different categories and from sample units for sample is gathered by the researcher.

Cluster sampling is the method under which entire geographic area is classified in to
different parts and from same sample units are taken by the researchers.
1.3 Questionnaire for research
Name...
Age....
Income....
1. What is the frequency of eating food in the Murano restaurant from the last 6 months in the
current year?
 2 ( )
 4 ( )
 5 ( )
 Greater than 5 times ( )
2. Our restaurant is making available high quality of facilities to the customers in the premises?
 Agree ()
 Strongly agree ()
 Neutral ()
 Disagree ()
 Strongly disagree ()
 Highly dissatisfied ()
3. Perception is the one of the most important factor that drives growth rate of the firm products
sales. Which of below given factors play important in forming positive or negative perception
about our restaurant among people in your opinion?
 Amenities ( )
 Closeness to house ( )
 Price of food items ( )
 Clean environment in premises ( )
4. Interior of the restaurant play a huge role in creating positive or negative image of the
restaurant among the people?
 Yes ()
 No ()

5. There are different categories of dishes that are served by our restaurant. Which of below
given dish you often eat in our restaurant?
 Highly spiced ()
 Less spicy ()
 Both sort of dishes ()
6. Without making much delay order is available on table in the Murano restaurant?
 Agree ( )
 Strongly agree ( )
 Neutral ( )
 Disagree ( )
 Strongly disagree ( )
7. Workforce of the restaurant behaves in systematic way with the customers in the premises?
 Yes ( )
 No ( )
8. In current time period some the competitor of the firm comes in existence and some were
already existed. In your opinion which of below gave restaurant give tough completion to the
Murano restaurant?
 Balti palace ( )
 Food for friends ( )
 Others ( )
9. All dishes are available at appropriate price in our restaurant?
 Yes ( )
 No ( )
10 Do you know about areas where rivals are stronger then Murano restaurant?
______________________________________________________________
11 Any recommendation from your side to Murano restaurant in respect to improving
performance?
____________________________________________________________________________

TASK 2
2.1 Statistical tools for analysis of data
Interior of the restaurant play a huge role in creating positive or negative image of the restaurant
among the people?
Yes 40
No 10
Table 1 Descriptive statistics on data
Mean 25
Median 25
Mode #N/A
STDEV 21.2132
Q1 17.5
Q2 25
Q3 32.5
Our restaurant is making available high quality of facilities to the customers in the premises?
Agree 10
Strongly agree 20
Neutral 5
Disagree 10
Strongly disagree 5
50
Mean 10
Median 10
Mode 10
STDEV 6.123724
Q1 5
Q2 10
Q3 10
Without making much delay order is available on table in the Murano restaurant?
Agree 26
Strongly agree 10
Neutral 2
Disagree 5
Strongly disagree 7
50

Mean 10
Media
n 7
Mode #N/A
STDE
V
9.40744
4
Q1 5
Q2 7
Q3 10
 Mean: Mean is the tool that is used to analyze the data in easy and systematic way by the
data analyst. Mean is the tool that helps one in understanding the variable in terms of its
status for the specific time period (Batarseh and Latif, 2016). Comparison of the mean
value with current value of variable speaks a lot about the variable. It can be said that
there is a huge significance of the mean as a descriptive statistical tool for the managers. Median: Median is another method that is used at large scale along with mean. The use
of median in data analysis is different than mean. For classification of data median value
is often used by the analysts. Classification of data set help one in identifying the trends
in which in past time period variable move. Mode: Mode is another method that is quite popular among the data scientists. The trend
that is coming in existence most of the times is identified by using mode value. These
tools have a lot of significance for the managers because trends that are repetitive in
nature can only be identified by using mode value.
2.2 Analysis of data
 Mean: Results are reflecting that mean value of the question that is asked on interior is
25 which means that most of respondents state that they think that interior play a very
important role in creating any positive or negative image of the restaurant among the
customers. Mean value is reflecting that most of respondents are agree on the fact that
restaurant is making available quality of product to the customers as its mean value is 10.
Mean value 10 is indicating that order is available to the Murano restaurant without
making any delay by the employees. It can be said that firm performance is excellent.

 Median: Median value is 25 in case of the question that is asked about the interior. This
means that it is the value that is separating data in to multiple parts. On other hand, in
case of quality of facilities median value is 10 and same for the delay in order variable
median value is 7. This is reflecting majority of respondents are agree on the fact that
firm is providing excellent quality of service to the customers.
 Mode: There is value of mode and due to this reason it is concluded majority of
respondents think that restaurant is making available quality of product to the customers
2.3 Measures of dispersion
Standard deviation is the tool that is along with mean, median and mode is widely used
by the managers for analysis of data (Batarseh and Latif, 2016). Value of standard deviation is
21.21 in case of variable role that interior play in creating image of the restaurant. This reflects
that deviation is not so high in case of variable and it can be said that most of respondents give
same answer on asked question. In case of variable quality of services standard deviation value is
very low which is 6.13 and it can be said that almost all respondents give same answer on the
asked question. In case of variable delay in delivery of ordered item standard deviation value is
9.47 and this also reflects that same answer is given by most of respondents. This means that
majority of respondents think that without making long delay product is made available to them
on time.
Figure 1Formula of standard deviation
2.4 Correlation and percentile
Table 2 Calculation of correlation
Quality of services Delay in order
10 10
10 7
10 0

6.123724357 9.407443861
5 5
10 7
10 10
Correlation -0.001772763
Interpretation
Correlation: Correlation coefficient is the tool that is used on large scale by the data analysts
because it help one in identifying the magnitude of the relationship that is among the variables
(Gandomi and Haider, 2015). Magnitude of relationship may be high, medium or low.
Correlation value is negative which mean that both variables are not associated with each other.
Currently, correlation value is -0.001 and this means that response received on both questions are
not related to each other.
Figure 2Quartile value of interior of restaurant
Yes 40
No 10
Q1 or P1 17.5
Q2 or P2 25
Q3 or P3 32.5
Figure 3Respondents response on quality of facilities
Agree 10
Strongly agree 20
Neutral 5
Disagree 10
Strongly disagree 5
50
Q1 or P1 5
Q2 or P2 10
Q3 or P3 10
Figure 4Respondents response availability of order on time
Agree 26

Strongly agree 10
Neutral 2
Disagree 5
Strongly disagree 7
50
Q1 or P1 5
Q2 or P2 7
Q3 or P3 10
Quartile: Quartile is the statistical tool that like median divide entire data set in to multiple parts.
Quartile value is reflecting that value of Q1, Q2 and Q3 is 17.5, 25 and 32.5. In case of variable
high quality of service value of Q1, Q2 and Q3 value of same is 5, 10 and 10. On other hand, in
case of variable delay in order value of Q1, Q2 and Q3 is 5, 7 and 10. It can be said that there is
less gap among the response received from the respondents. This means that all respondents give
same response.
TASK 3
3.1 Producing graph
What is the frequency of eating food in the Murano restaurant from the last 6 months in the
current year?
Table 3Frequency of eating food in the restaurant
2 30
4 7
5 6
Greater than 5 times 7
Total 50

2 4 5 Greater then 5
times
0
5
10
15
20
25
30
35
30
7 6 7
Series1
Figure 5Frequency of eating food in the restaurant
30
7
6
7
Chart Title
2 3
4 Greater then 5 times
Figure 6Respondents response on question frequency of eating food in the restaurant
Interpretation
Results are reflecting that most of people visit two times Murano restaurant as out of 50
there are 30 people that accept mentioned statements. There are 7 respondents who visit
restaurant 4 times followed by 6 respondents that visit restaurant 5 times in a month. It can be
said that most of people visit Murano restaurant 2 time in the month.
Our restaurant is making available high quality of facilities to the customers in the premises?

Table 4Quality of services
Strongly agree 20
Agree 10
Neutral 5
Disagree 10
Strongly disagree 5
Total 50
Strongly agree
Agree
Neutral
Disagree
Strongly disagree
0 5 10 15 20 25
20
10
5
10
5
Series1
Figure 7 Quality of services
20
105
10
5
Chart Title
Strongly agree Agree Neutral
Disagree Strongly disagree
Figure 8Respondents response on quality of services

Interpretation
Results reflects that restaurant is making available high quality of services to the people.
20 respondents out of 50 are strongly agree with the face and 10 are agree on same. 5
respondents are neutral and 10 are disagree followed by 5 are strongly disagree on same
statement. It can be said that restaurant is giving good services to the customers.
3.2 Trend analysis chart
1 2 3 4 5
0
20000
40000
60000
80000
100000
120000
140000
f(x) = 13000 x + 51000
Series1
Linear (Series1)
Figure 9Trend analysis chart
Interpretation
Results are indicating that sales of the firm is growing consistently and in upcoming time
period also its growth rate will be same in terms of value. Trend line is not crossing last bar
which means that in the upcoming time period also firm will make sale of £1, 25,000 in its
business. In order to make reliable prediction firm can make use of other statistical tools and can
make decisions on basis of same (Zhou. and et.al., 2014).
3.3 Covered in PPT
3.4 Formal business report
To
The Director of Murano restaurant Date: 12-04-
2017
Subject: Performance of the firm and results of research

Introduction
In the current research report detail analysis of market is done and an attempt is made to
understand the perception that people have in respect to the business firm. In this regard, data
analysis is done and conclusion is formed in the report.
Research methodology
In the current research report thematic analysis is done in order to analyze the primary data.
Sample of 50 respondents is taken by following appropriate sampling method in the research.
Stratified random sampling method is used to select sample units from the population.
Data analysis
Analysis of data reflects that firm gives best performance in its business and its sales increased
at fast rate in the business. People have positive perception towards the firm and they think
that firm is providing excellent quality services to them. This is proved from the fact that in a
month at least two times people visit firm restaurant. Moreover, they also give due importance
to quality factor in analysis of data. It can be said that firm successfully retain customers in its
business and it need to maintain quality of its products in order manage market share in the
business.
Recommendation
It is recommended that firm must expand its business and must try to improve its services
more so that satisfaction level of customers can be enhanced. Apart from this, it is also
recommended to the business firm that it need to improve its product quality more. In this
regard it can make available hygienic food items to customers in the restaurant.
TASK 4
4.1 Information processing tools
There are number of different sort of information processing tools and some of them are given
below.
Management information system: It is the one of the main system that is used on large scale by
the firms. In every minute data is generated in the business and same is saved in the management
information system. These saved data are used for analysis purpose and on that basis decisions
are made by the managers.

Decision support system: Decision support system is another one that is used to make strategic
decisions in the business (Wilder and Ozgur, 2015). This information system possess advanced
features that are used for building a model by using which useful output is generated and
decisions are made. It can be said that decision support system is very important for the firm.
Transaction processing system: Transaction processing system is another system in which cost
related items data is stored. By using relevant information cost related decisions are taken by the
managers.
R Software: It is one of most important software that is used to analyze data and making
business decisions. Under this data is entered in to software and by doing coding same is
analyzed by using different sort of statistical packages. R software is commonly used to perform
regression, cluster analysis and decision tree etc.
Tableau: In this software visualization of data is done and under this charting of variable is done
by using advanced functions like LOD and different other functions. With due granularity data is
analyzed in mentioned software. It can be said that it is one of important information processing
software.

4.2 Network diagram
Interpretation
Network diagram is the one of the most important method that is used in the project
planning and implementation. It is the method that reflect the chronological order in which
activities must be performed. It can be seen from the chart that critical path is 1+5+8+9= 22
Figure 10GANTT chart
Figure 11Network diagram

days. This means that mentioned activities cannot be delayed. Those activities that are not in
critical path can be delayed or can be performed latter then planned time (Radoš and et.al.,
2016 ). Critical path reflect core activities that cannot be delayed by single day. It is important to
identify critical path because by using same it is ensured that project cost will be controlled.
Means that project manager must ensure that activities that are in critical path are not delayed. If
same will not be done then in that case project cost will increase at rapid rate.
4.3 Project evaluation method
Figure 12Calculation of NPV
Interpretation
NPV refers to the net present value of the project. Results reflect that NPV of the project
is negative which means that same is not profitable for the business firm. Thus, of investment
will be made in same then good amount of profit cannot be earned on the project. NPV is
computed by following a specific procedure under which first of all cash flows are estimated and
then present value of same is calculated by using specific discount rate. Cash flow is multiplied
by the present value factor to compute current value of cash flows. Sum of the present values is
done and from same initial investment value is deducted to compute final net value of the
project.

Table 5Calculation of payback period
Project A
Initial
investment -190000
1 50000 -140000
2 64000 -76000
3 58000 -18000
4 70000 52000
Interpretation
Payback period is indicating time by which wait need to be done by the firm to cover cost
of project. Out of 5 four years’ time is taken by the firm to cover cost. It can be said that project
is not viable for the firm.
Table 6Calculation of ARR
Project A
Initial
investment 190000
1 50000
2 64000
3 58000
4 70000
Total 242000
Average 60500
ARR 31.84%
Interpretation
ARR reflect average return that can be generated by project. ARR of project is 31.84%
which is low and it can be said that same is not viable for the firms.
Internal rate of return method

Figure 13Calculation of IRR
Interpretation
IRR refers to the internal rate of return and this method is used to compute the actual
percentage that can be received on the proposed alternative (Project evaluation methods, 2016).
Results reflect that IRR on the project is merely 9.94%. It can be said that IRR of project is very
low and due to this reason same cannot be assumed profitable for the business firm. To some
extent there is a need to increase the IRR of the project. It can be said that there is due
significance of the IRR method in respect to selection of project.
CONCLUSION
On the basis of above discussion it is concluded that statistics is the one of the greatest
domain that is widely used to solve the business problem. There is a huge significance of
statistics for the business firms because using same data are analyzed in the systematic way and
decisions are made by the managers in the appropriate manner. Mean, median and mode must be
applied on the data set in order to get proper view of same. On the basis of obtained results better
decisions can be made by the managers. Apart from this, trend analysis method must also be
used to make prediction and business decisions. Selection of project is very tough task and due to
this reason project evaluation methods must be used to evaluate the project. By doing so wise
selection and correct decisions can be taken by the managers for the business firm.

REFERENCES
Books and journals
Batarseh, F.A. and Latif, E.A., 2016. Assessing the Quality of Service Using Big Data Analytics:
With Application to Healthcare. Big Data Research. 4. pp.13-24.
Gandomi, A. and Haider, M., 2015. Beyond the hype: Big data concepts, methods, and analytics.
International Journal of Information Management, 35(2), pp.137-144.
King, D.L., 2015. Analytics, goals, and strategy for social media. Library Technology Reports.
51(1). pp.26-32.
Lock, P.F. and et.al., 2013. Statistics: Unlocking the power of data. Hoboken, NJ: Wiley.
Radoš, S. and et.al., 2016. Towards Quantitative Visual Analytics with Structured Brushing and
Linked Statistics. In Computer Graphics Foru. 35. (3), pp. 251-260.
Ranyard, J.C., Fildes, R. and Hu, T.I., 2015. Reassessing the scope of OR practice: The
influences of problem structuring methods and the analytics movement. European Journal
of Operational Research. 245(1). pp.1-13.
Wilder, C.R. and Ozgur, C.O., 2015. Business analytics curriculum for undergraduate majors.
INFORMS Transactions on Education. 15(2). pp.180-187.
Zhou, L. and et.al., 2014. High abundance and diversity of nitrite-dependent anaerobic methane-
oxidizing bacteria in a paddy field profile. FEMS microbiology letters. 360(1). pp.33-41.
Online
Project evaluation methods, 2016. [Online]. Available through:<
https://ceopedia.org/index.php/Project_evaluation_methods>. [Accessed on 12th April
2017].