Business Decision Making

This document discusses the role of statistics in business decision making, focusing on market research, sampling methods, and various statistical measures such as mean, median, mode, range, standard deviation, quartiles, and correlation.

BUSINESS DECISION MAKING

Table of Contents
INTRODUCTION.......................................................................................................................................3
TASK 1.......................................................................................................................................................3
1.1................................................................................................................................................................3
TASK 2.......................................................................................................................................................5
2.4............................................................................................................................................................9
TASK 3.....................................................................................................................................................11
3.1..........................................................................................................................................................11
3.3 Enclosed in Power point presentation.............................................................................................15
3.4..........................................................................................................................................................19
TASK 4.....................................................................................................................................................20
CONCLUSIONS.......................................................................................................................................25
REFERENCES..........................................................................................................................................26

INTRODUCTION
The role of statistics has increased with the increasing interfaces that clarify the data
related problems of an entity on a global level. Business analytics are using the traditional
statistical measure that helps an entity in order to predict the future. Thomas Cook has been
selected for this project report which has been used in order to develop their new product to lire
most of their customers. This is all about collecting primary data by conducting survey through
questionnaires. The data collected by an entity is summarized by using measures of central
tendency such as mean, median and mode majorly. The business projects are evaluated by using
capital budgeting tools in order to assess the feasibility and viability of the projects.
TASK 1
1.1
The complex job involves while opening a new business is to conduct market research
which helps in enhancing the business efficiency. The market research conducted by research
will be able gather facts and figures to support the research. Data that can be collected for
conducting a smooth research can be obtained by applying two major research approaches such
as primary and secondary sources of the data. Information can be in the form of different facts
and figures collected from first-hand and original source of data by individual person. Secondary
sources of data are also referring to as taking external and highly efficient data which saves the
time of an individual. The secondary research can be obtained by using books, journals, articles
and several records of the government. It is best suitable data which can be obtained without
wasting time or appointing any counsellor in gathering the data personally. The primary
objective of this particular research study is to gather facts and figures in order to launch their
new product of offering tour packages to lure their customers. The Thomas Cook can use
Primary data collection methods in order to gather evidences to support their research. The
questionnaires can be used in order to develop their overall products.
1.2
Sampling is regarded one of the important element in conducting particular research
study which stresses on gathering data from various sources that can produce reliable
information. There are several forms of sampling methods which can be used by an entity in
order to produce accurate results to support an entity which are given as below:

Random sampling- The random samples are selected blindly by applying personal belief of an
individual and rely on the intuition to achieve their project aim. The samples size is selected in
the advance before conducting research in a particular area. The samples are randomly selected
from large base of population without specifically observed its efficiency and relevancy. For
instance, The Thomas cook has designed a batch of 200 customers which are further segmented
into different areas to catch the interest of wide number of customers according to their tastes
and preferences.
Stratified sampling- This form of sampling method is recognised with another name of cluster
samping technique which are gathered data in strata or a kind of group of same category.
Samples are designed which is basically a group of samples categorised as per different criteria
of the research. The products are designed by an entity which will segmented their overall
products into different demographic features such as age, gender.
1.3
QUESTIONNAIRE FOR RESEARCH
Name:____________
Age: ______
Gender
Male () Female () Transgender ()
Do you visit Thomas Cook centre?
 Yes []
 No []
Frequency of visiting Thomas cook travel centres?
 Once in month {}
 Once in year {}
What factors beat competitors of Thomas Cook?
o Discount ()
o Quality ()
o Brand ()
o Locality ()
Which are the factors you considered before Booking for any tour packages at Thomas Cook?

 Price []
 Quality []
 Store location []
 Refund policy []
In terms of service quality what rank you want to give Thomas Cook as compare to their
competitors?
 Excellent ()
 Good ()
 Average ()
 Poor ()
Which rival firms store you often visit?
 Cox& kings []
 Make my trip []
Please give your valuable suggestions in relevant areas where Tesco must bring changes in its
services __________________________________________________________________
TASK 2
2.1&2.2
Table 1: Calculation of mean, median and mode
Amount
Spent (£)
Number of
customers (f) Mid- value(x) fx Cumulative Frequency (CF)
10-20 18 15 270 18
20-30 20 25 500 38
30-40 16 35 560 54
40-50 14 45 630 68
50-60 12 55 660 80
60-70 8 65 520 88

70-80 6 75 450 94
80-90 4 85 340 98
90-100 2 95 190 100
100 4120
Mean calculation
Mean Formula= ∑FX/∑F
=4120/100
=41.2
Computation of Median
Formula= ∑F/2
=100/2
=50
The median value of 50 is in range of 30-40
Median= L1+[(N/2-C)/F]*i(class size)
M=30+[(100/2-38)/16]*10
M=30+7.5
=37.5
L1= Lower limit of the class interval
N= number of frequency
C= preceding cumulative frequency of 30-40 interval
F= Frequency of 30-40 class interval
i= class size that is difference between the class interval
Mode calculation
Z= L1+ (F1-F0)/[2(F1)-F0-F2]*i(class size)
Z= 20+ (20-18)/[2(20)-18-16]*10
=23.33
L1= Lower limits of class interval
F1= preceding frequency of class interval 30-40
F0= Succeeding frequency of class interval 30-40

F2= Frequency of class interval 30-40
Interpretations
Mean- The arithmetic mean is regarded as one of the important methods of central
tendency is play a significant role in the overall statistics. This unique concept of the statistics
has raised the business efficiency that created wider scope of innovative and creative technology
(Rao and Tilt, 2015). In the present case scenario, the arithmetic mean of above set of data is
41.2 which obtain the true performance by judging the accurate information related to the
development of overall product of travel operator. It has been observed that on an average basis
customer makes purchase in the price range of 40-50.
Median- Another statistical tool which is another measure of central tendency that helps
an entity in determining the middle value out of bundle of data (Triantaphyllou, 2013). It helps in
segmenting the large sample of population into multiple parts. This method is commonly used by
stock analyst to understand the pattern of share price and its movement in future. The median of
the above group of data is 37.5 which mean that the figure has classified in the series of
continuous distribution.
Mode- Another important tool used in statistics is mode which is another element in the
tri-component chain of several values. These values will assist an enterprise which is used to
judge the data by measuring its repetitiveness in whole set of data. The higher occurrence of a
particular number refers to as mode of the whole set of data (Welsh and Birch, 2015). It should
be noted that there are various kinds of mode which is totally based on the specific situation in
which there will be two modes, one mode or the situation arises in which there will be no mode.
In the above data, value of mode is 23.33 in whole set of information.
2.3
Range= Maximum value- lowest value
=100-10= 90
Interpretations
Range is regarded as essential aspects that create a particular range in which overall
values will give adequate direction to an enterprise. It is recorded as one of the important aspects
one of the concepts of descriptive statistics which is basically a difference between highest value
and lower value of set of data (Sources of finance., 2012). The range reflects the size of the
smallest interval which contains all kind of data and provides an indication of statistical

dispersion. The value of range in given situation is 90 as it can be said that there is difference in
relevant values.
Table 1: Calculation of standard deviation
Amount Spent
(£)
Number of
customers (f) Mid- value(x) FX X^2 FX^2
10-20 18 15 270 225 4050
20-30 20 25 500 625 12500
30-40 16 35 560 1225 19600
40-50 14 45 630 2025 28350
50-60 12 55 660 3025 36300
60-70 8 65 520 4225 33800
70-80 6 75 450 5625 33750
80-90 4 85 340 7225 28900
90-100 2 95 190 9025 18050
100 4120 33225 215300
Variance (S^2) = ∑Fx2 – ((∑Fx)2 /n)/ n – 1
= 215300 – (4120)^2/100/(100-1)
= 460.16
Standard deviation = √ Variance
= √ 460.16
= 21.45
Interpretations
Standard deviation is a measure which measures the changes or we can say variation in
the overall amount of the sample of population which is used to quantify the amount of variation
or dispersion of a set of data (Graham, Harvey and Puri, 2015). A lower standard deviation
symbolises that data points tend to be similar to the mean and higher value will indicates that

data are spread over the determined range. In this case, the value of standard is 21.45 which are
very low and do not show any kind of attraction with the mean values. Hence, it can be said that,
customers will purchase items valued at 41.2 in Thomas Cook store.
2.4
Table 1: Calculation of percentile
Type of quartile Formula Figures
Lower quartile (Q1)
Q1 Q1 = ∑F/4 = 100/4
= 25
Q1 = L1 + (∑F/4 – C)/F * i = 20 + (25-18)/20*10
= 23.5
Upper quartile (Q3)
Q3 q3 = 3(∑F/4) = 3(100/4)
= 75
Q3 = L1+ [3(∑F/4)-C/F]* i = 50 + (75-68)/12*10
= 55.83
Percentiles Quartiles Values
25th percentile Lower quartile (Q1) 23.5
75th percentile Upper quartile (Q3) 55.83
Interpretations
In the cited case, 25th percentile is regarded as lower quartile is given as 23.5 and 75th
percentile which is renowned as higher percentile is 55.83 (Craft, 2013). It has been observed
that up to first quartile, number of customers is increasing but in case of Q3 number of customers
is declining. Hence, it can be said that transformation takes place in the trend.
Inter-quartile range
IQR= Q3-Q1

= 55.83-23.5= 32.33
Interpretations
Inter-quartile range refers to the difference between varieties of quartile that can be
calculated by data analyst. This value represents the difference between higher and lower quartile
that is 32.33 which shows moderate position.
Sales (Units) Discounts (%)
20 1
40 4
50 6
55 6
60 10
70 12
80 13
90 14
100 15
Table 1: Calculation of correlation
Particulars Sales (Units) Discounts (%)
Sales (in Units) 1 0.97
Discounts (%) 0.97 1
Interpretations
Correlation is that tool which is commonly used in statistics by the data scientists to
determine the relationship between two variables (Hwang and Yoon, 2012). It has been observed
that the value of correlation is 0.97 and it reflects that both the sales and profit are in correlation
with each other.

TASK 3
3.1
Illustration 1: Column chart
Interpretations
From the above column chart it has been observed that, the sales figure of the company
has continuously increasing from 2002 to 2015 (Boulay, 2015). It shows the ability of the firm
that which reduces the advertisement expenses in order to increase their overall sales and the
revenue of an enterprise. The primary aim of this analysis is to incorporate all kind of changes
that creates additional impact on the business of an enterprise.

2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
0 1000 2000 3000 4000 5000 6000
Illustration 1: Bar graph
Interpretations
Bar chart of the enterprise is helps in revealing the capabilities of an organisation which
in turn show the wonderful performance of the firm in previous years (Welsh and Birch, 2015).
The decreasing expenses on advertisement have increases the sales level which in turn increases
the amount of profit generated by the company. The bar chart is one of the visual presentations of
graphical data that produces the results in a systematic manner.
Pie chart for the net income generated by 5 branches of the company in 2015

Illustration 1: Pie chart
Interpretations
This pie chart reflects the net income generated by the company from its different
branches of their travel centres as they are currently operating at a global level (Kahraman, Onar
and Oztaysi, 2015). The above pie chart is one of the methods of comparison is on the
geographic representation in relation to the net income. It shows higher income among two
famous cities of the United Kingdom such as two cities that is Birmingham and London.

2000 2002 2004 2006 2008 2010 2012 2014 2016
0
1000
2000
3000
4000
5000
6000
Illustration 1: Scattered diagram
Interpretations
This chart reveals the increasing sales figure as compared to the advertisement figures of
an enterprise. Every organisation tries to decrease their overall expenses held by them which in
turn enhance the brand image as they able to control their overall expenses in order to increase
their sales and the revenue of an enterprise. (Triantaphyllou, 2013).
3.2

Interpretations
The trend line chart is highly affected by the regression analysis that also works as one of
the prediction tool which will help an entity in order to initiate their business proceedings. This
tool is commonly used by business managers to make certain business predictions. The business
is operates on higher risks and all its decisions are taken to minimised the effects of these future
uncertainties. There are various kinds of business alternatives that can be used by the firms for
predicting the future of the business by using the present market information (Petersen,
Kushwaha and Kumar, 2015). It can be seen from this trend line chart that in future years the
sales level of the enterprise can be enhanced. With the increasing sales figure of the organisation
it will also enhances their future potential growth but in this situation it shows slow growth rate.
Primary deficiency of this approach is that the trends are prepared on the basis of past years
which will not assure an entity by eradicating weaknesses from its roots and banned the entry of
that in near future. This incomplete presentation is not effective in predicting the future as the
decisions based only on past figures is not appropriate.
3.3 Enclosed in Power point presentation

3.4
To
The Directors of Thomas Cook
Date- 26 November 2016

Sir/Ma'am
In today's Modern world the hospitality sector is constantly changing which enhances the role of
travel sector by creating external difficulties by adding the touch of technology as one of the
important factor (Welsh and Birch, 2015). Core competencies are that unique capabilities of a firm
which helps an enterprise in order to get competitive advantage over its competitors. The current
sales figure of the firm has been evaluated by applying different statistical tools will forms a basis
of taking future decisions. This helps in making future decision that it will further increase in near
future with higher level of sale. However, this increasing speed of growth of sales can be reduced
in future. Developing a new product is the biggest decision which needs to be taken in near future
after considering all negative and positive risks. This business efficiency is th primary motto of the
research study which is determined by applying statistical measures which are taken into
considerations in order to form correct decisions. Trend analysis is another important approach that
helps an entity in order to determine a particular market trends in terms of tastes and preferences of
all kind of buyers. This is essential to aware management regarding future potential risks that can
ruin the existing business growth by making advance future plans. Firm is earning good amount of
revenue in the business which is backed by the advertisement of the product that is done by the
enterprise. Future strategy of the enterprise states that more aggressive promotion strategy needs to
be followed in order to elevate sales growth rate.
TASK 4
4.1
An entity need to place particular kind of information processing tool at their workplace
as the work related information are transferred from one end to another in order to convince all
their business users towards the decisions taken by the mentor. There are various kinds of
information processing systems to facilitate the process of sharing of information from one
source to another source. The varieties of information systems which can be used in this business
are given below:
Transaction processing system- The daily routine business transactions takes place in every
entity which will be stored with the help of using adequate technology. It may be defined as a
type of information system that stores as well as modifies and retrieves daily routine transactions

of the enterprise (Triantaphyllou, 2013). This particular system works virtually as the accuracy
are determined by using technology of transactions and then produce the good results after
correcting the inherit error occurring in several business transactions. TPS systems are designed
to process transaction virtually to ensure that the customer data is available in the processes.
Some of different attributes of TPS are the following:
 Access control
 Equivalence
 High-volume rapid processing
 Truth worthiness
The qualifiers are one of the criteria or parameters to judge the efficiency of all the daily routine
data in real time. These will test the efficiency and effectiveness of the transactions which are
given as below:
 Authenticity
 Consistency
 isolation
 Durability
Office automation system- The general daily routine business activities of the business entity
are automated by using application software. This particular element is an amalgamation of
hardware, software and other resources which are required to smooth the progress of
communication efficiency (Triantaphyllou, 2013). It refers to that tools and methods that are
applied to several business activities. It utilises use computer in th back end and software in the
front end in order to generate, collect, store, manipulate and convey confidential information for
accomplishing basic tasks and goals through digital and electronically. It includes additional
activities such as exchange of information, management of administrative data and handling of
the numerical data.
4.2
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
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
Interpretations
Gantt chart is one of the important tools of project management which is commonly used
in scheduling of tasks and duties to segment the overall project into several fragments. It is
considering the time element as all activities are assigned adequate time due to which the overall
performance of the project can be monitored. The delay in one particular activity may lead to
delay in the whole project.

Interpretations
Another important part o project management is network diagram that visually presents the
overall parts of the project into systematic flow of activities. This will ensure the critical path of
the project that is actual time required by the project in completing the whole project. The time
required by this particular project is 2+6+8 that means 4+5+5= 14 weeks.
4.3
Project A PV @10% Present value Project B PV @10% Present value
Initial
investment 250000 250000
1 100000 0.909 90909 90000 0.909 81818
2 115000 0.826 95041 125000 0.826 103306
3 125000 0.751 93914 135000 0.751 101427

4 130000 0.683 88792 110000 0.683 75131
5 140000 0.621 86929 85000 0.621 52778
Total 455585 414461
NPV 205585 164461
Interpretations
The profitability of the future projects are evaluated by assessing the business proposal by
applying important tool of capital budgeting that is net present value method (Rao and Tilt,
2015). It is that method which helps in determining the future profitability by using same
discounting factor rate of 10%. It has been observed that after evaluating both the projects it has
been observed that project A has generated higher amount of NPV than project B hence, it
should be selected.
Project A Project B
Initial
investment -250000 -250000
1 100000 90000
2 115000 125000
3 125000 135000
4 130000 110000
5 140000 85000
IRR 36.47% 33.28%
Interpretations
Internal rate of return is another measure of capital-budgeting that uses time value of
money in order to ascertain the rate at which an enterprise can earn profitability and their initial
investment and the future cash flow gets equal (Triantaphyllou, 2013). The IRR is higher among
project A that is higher than the cost of capital of an enterprise so it should be selected.

From the above usage of two different capital budgeting technique applied in evaluating the two
projects such as NPV and IRR which is helpful for an enterprise in assessing their efficiency. It
has been determined that project A has been selected as a unanimous decision of both the
approach.
CONCLUSIONS
It can be summarized from the above project report that results obtained by using
statistical measures will help Thomas Cook in developing their new products. The launching of
the products will be able to lure the interest of all the individuals.

REFERENCES
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Online
Sources of finance., 2012. [Online]. Available through: <http://
http://www.bized.co.uk/learn/business/accounting/sources/index.htm>. [Accessed on 26
November 2016].