Murano Restaurant Expansion Analysis

This assignment analyzes the financial feasibility of expanding Murano restaurant. It examines past sales revenue and profit margins, uses trend lines to predict future performance, and ultimately determines if opening a new branch is financially viable. The analysis also explores alternative growth strategies for the restaurant.

Business
Decision
Making

Table of Contents
INTRODUCTION......................................................................................................................1
TASK 1......................................................................................................................................1
1.1 Developing plan for the collection of data.......................................................................1
1.2 Designing methodology for survey and determine suitable sample for the study...........2
1.3 Framing questionnaire......................................................................................................3
2.1 Summarization of secondary data by using representative values...................................6
2.2 Analyzing results for drawing valid conclusion about results.........................................7
2.3 Measures of dispersion and its use in decision making...................................................9
2.4 Assessment of quartile, percentile and correlation co-efficient.......................................9
TASK 3....................................................................................................................................10
3.1 Producing graphs by using spread sheets.......................................................................11
3.2 Creating a trend line for evaluating future growth and performance.............................11
3.3 Preparation of power point for the effectual disclosure and dissemination of
information...........................................................................................................................12
3.4 Producing a formal business report................................................................................18
4.1 Use appropriate information processing tools for decision making...............................18
4.2 Preparation of project plan and determination of critical path.......................................19
4.3 Using financial tools for decision making.....................................................................20
Conclusion of the entire report:................................................................................................22
REFERENCES.........................................................................................................................23

INTRODUCTION
In the present times, business entity has to take effectual financial and non-financial
decisions that directly aid in the growth as well as profitability aspect of firm. In this regard,
manager must have ability to make proper assessment of market trend as well as needs, wants
and expectation level of the customers. Along with this, now several statistical and financial
tools are available that can be used by managers for decision making. Hence, by making
appropriate decisionfirm can get the desired level of outcome or success. The present report
is based on Murano which provide customers with the amazing dining experience. In this, the
present report will describe the manner in which researcher can gather data for conducting
investigation. Further, report will develop understanding about the manner in which
techniques of statistics such as mean, mode and median assists in making suitable decision
through summarization. Besides this, report will also provide deeper insight about how
techniques of investment appraisal assist in making selection of suitable proposal.
TASK 1
1.1 Developing plan for the collection of data
By considering the trend of tourism in London and growth of restaurant sector
business entity of Murano has taken decision in relation to opening of restaurant. With the
motive to reduce the level of risk restaurant owner is planning to conduct research which in
turn helps in getting information about market and target market. Thus, by keeping such
aspects in mind scholar has undertaken both primary and secondary data methods are as
follows:
Primary data collection and plan: It implies for the data which is obtained by the researcher
through the means of observation, focus group, interview etc. (Ramnarayanan, Berenson and
Oppenheim, 2016). Hence, in this, researcher makes his own efforts for the collection of data
in accordance with the research issue or purpose.
 Selection of method: In the first step, researcher selects type of method which he
needs to undertake for the collection of data. Hence, in this, researcher has taken
decision to collect data through the means of survey. It is the most effectual methods

which in turn help in the collecting suitable information about the issue within the
suitable time frame.
 Framing questionnaire: For survey, questionnaire is the prior requirement which
scholar has to frame for the collection of data (Siegel, 2016). Hence, in the second
stage, researcher prepares questionnaire by including both close and open ended
questions. Hence, scholar will develop questionnaire by considering the main four
aspects product, price, place and promotion.
 Determination of sample size: At this stage, scholar will assess sample to conduct
survey in an effectual way. Thus, by using purposive sampling technique 20
customers of Murano.
 Sending questionnaire and collection of data: Once sample has been selected
thereafter researcher will send questionnaire to the customers of Murano.
Hence, by taking into consideration all the above mentioned stages researcher would
become able to gather primary data.
Secondary data collection and planning: Data which is readily available for the research
purpose and decision making is known as secondary source (Jaggia and et.al. 2016).
Government reports, organizational studies and outcomes, journals as well as scholarly
articles are the most common means that can be undertaken by scholar for the collection of
secondary data. In this, researcher will make analysis of government report to get information
about the ratio or level of inbound and outbound tourists. This in turn also helps in assessing
the growth and customer preferences in relation to restaurant sector. Hence, researcher will
also make evaluation of the scholarly to identify the factors that havehigh level of impact on
customer decision making.
1.2 Designing methodology for survey and determine suitable sample for the study
 Survey methodology: It entails the ways through which study can be conducted by the
researcher on individuals which are selected from population. In other words, survey
methodology describes the manner through which researcher will implement the plan
of data collection (Chiou and Wang,2016). Hence, online survey methodology has
been selected by the researcher with the motive to save both time and cost. Thus, by
employing written survey methodology view points of customers will be assessed.
Hence, researcher will make efforts to acquire the mail id of customers. Further,
researcher will take permission from target customers as they are interest to

participate in research. Thereafter, researcher will mail questionnaire to the
respondents on their mail id. Hence, by following such process data will be gathered
by the researcher.
 Sampling: It is the main parts of research which is highly concerned with the
assessment or selection of the subset of individuals. The main aim of sampling is to
select the sample which has the characteristics of whole population (Anderson and
et.al.2016). Probabilistic and non-probabilistic are the main two types of sampling
technique that can be used by the researcher for the selection to suitable sample.
Hence, in the present investigation, purposive sampling technique has been selected
by the scholar which is the part of non-probabilistic sampling technique. Hence, by
considering this, 20 customers have been selected by the researcher. Thus, researcher
would become able to derive suitable solution by placing emphasis on such
respondents.
1.3 Framing questionnaire
Questionnaire
Name………
Gender…………
Status:
 Self-employed ()
 Full time employee ()
 Part time ()
 Student ()
 Professional ()
About restaurant
1. Do you agree that interior and exterior of the restaurant is highly unique or attractive?
 Agree ()
 Strongly agree ()
 Neither agree nor disagree ()
 Disagree ()
 Strongly disagree ()

2. Are you satisfied with the ambiance, décor and lighting of restaurant?
 Satisfied ()
 Highly satisfied ()
 Neutral ()
 Dissatisfied ()
 Highly dissatisfied ()
3. Do you think that restaurant offers high value for money?
 Yes ()
 No ()
4. Do you agree that proper hygiene and food quality is maintained by the restaurant?
 Agree ()
 Strongly agree ()
 Neither agree nor disagree ()
 Disagree ()
 Strongly disagree ()
5. Is menu and price level set by the restaurant is good?
 Yes ()
 No ()
About customers
6. How often do you dine with Murano whenever take decision about the selection of
restaurant?
 Often ()
 Most often ()
 Once in a week ()
 Never ()
7. Specify the price which do you ready to pay for dinning services in relation to two
people….Kindly mention

8. From the below mentioned elements quality of services and food quality fall in which
category?
 Excellent ()
 Better ()
 Good ()
 Average ()
9. How do you get information about the dinning services of Murano?
 Television ()
 Newspaper ()
 Social networking sites ()
 Friends ()
 Family members ()
10. Do you agree that waiting time has high level of impact on your satisfaction and loyalty
aspect?
 Yes ()
 No ()
11. Would you prefer to visit restaurant again in the near future?
 Yes ()
 No ()
About personnel
Kindly state your level of agreement with the below mentioned statements
Particulars Agree Strongly
agree
Neutral Disagree Strongly
disagree
Personnel of
restaurant
are highly
skilled and
efficient
They

welcome
customers in
a polite
manner
Employees
have ability
to offer food
to the
customers in
accordance
with their
needs, wants
and
expectations.
Present
menu and
offer food in
an
innovative
manner
Recommendation section: Kindly give recommendations for improvement and support it
with specific reasons
2.1 Summarization of secondary data by using representative values
Sales and profit figures of Murano from 2008 to 2015 are as follows:
Years Sales
(£)
Profit
(£)
2008 1300 320
2009 1450 370
2010 1620 430
2011 1580 410

2012 1568 390
2013 1700 450
2014 1880 520
2015 2100 550
Mean:
Median: (N+1) / 2
Particulars
Sales
(£)
Profit
(£)
Mean 1649.75 430
Median 1600 420
Mode #N/A #N/A
Range 800 230
Minimum 1300 320
Maximum 2100 550
Sum 13198 3440
Count 8 8
The above mentioned table presents that average sales and profit generated by firm in
the last 8 years account for £1649.75 & £430 respectively. On the other side, 50% of sales
revenue and profit is related with £1600 & £420. It shows that mean and median value is
highly near to each other. Further, maximum and minimum value of sales amounted to£2100
& £1300. Thus, entrepreneur should consider the outcome of such statistical analysis which
policies framework
2.2 Analyzing results for drawing valid conclusion about results
Primary data analysis
Theme 1: Customers stated in survey that Murano offers high value for money by
providing quality services to customers
Particulars Views of respondents % of respondents
Yes 18 90%

No 2 10%
Total 20 100%
Yes No
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Chart Title
% of respondents
x
y
Theme 2: Respondents rated service quality and offering of Murano as excellent.
Particulars Views of respondents % of respondents
Excellent 7 35%
Better 5 25%
Good 4 20%
Average 3 15%
Poor 1 5%
Total 20 100%

Excellent Better Good Average Poor
0%
5%
10%
15%
20%
25%
30%
35%
40%
Chart Title
% of respondents
x
y
The above mentioned graph presents that large number of customers are highly
satisfied from the services of Murano. Now, customers prefer to dine in the restaurant which
maintains proper hygiene. Thus, owner should keep in mind such aspect while making plan
about the offering of second restaurant.
2.3 Measures of dispersion and its use in decision making
Variance (S2) = average squared deviation of values from mean
Standard deviation (S) = Square root of variance
Computation of measures of dispersion
Particulars Sales Profit
Standard
Deviation 248.689 76.1577
Sample Variance 61846.2 5800
Kurtosis 0.52653 -0.4643
Skewness 0.64331 0.36481
Tabular presentation shows that standard deviation and sample variance of sales is
£248.69 & £61846.2 respectively. Hence, standard deviation shows that in the near future
mean value of sales will deviate from such amount. However, standard deviation of profit
margin is £76. Hence, manager of the restaurant should consider standard deviation which in
turn enables him to frame competent monetary plan (Huang, Critchley and Zhang, 2016).
2.4 Assessment of quartile, percentile and correlation co-efficient
Q1 = (n + 1) / 4th term

Q2 = (n + 1) / 2th term
Q3 = 3 (n + 1) / 4th term
Calculation of quartile
Quartiles Sales (in £) Profit (in £)
1st quartile 1538.5 385
2nd Quartile 1600 420
3rd Quartile 1745 467.5
Calculation of percentile
Particulars Sales (in £) Profit (in £)
25th Percentile 1538.5 385
50th Percentile 1600 420
75th Percentile 1745 467.5
Outcome of quartile and percentile exhibits that both sales as well as profit of
restaurant increased in from 1 quarter to the 3rd one. In the first quarter sales revenue was
£1538.5, whereas it reached on £1745 in third quarter. Besides this, profitability aspect also
shows positive trend in the performance level of restaurant on the ground on each quarter’s
amount. Hence, secondary data evaluation shows that business unit is performing well and
customers have positive attitude towards the services of Murano (Spetzler, Winter and
Meyer, 2016).
Computation of correlation co-efficient
Particulars Sales Profit
Sales 1 .99
Profit .99 1
Statistical output or results show that higher and positive relationship takes place
between the sales and profit margin such as .99 respectively. It entails that both the elements
will move in the similar direction. Further, increase or decrease in one variable will place
significant impact on another. On the basis of this aspect restaurant owner needs to lay
emphasis on enhancing sales revenue through the means of promotional programs and unique
offering (Watson, Teaque and Papamarcos, 2016). By this, restaurant owner would become
able to enhance profit margin significantly.

TASK 3
3.1 Producing graphs by using spread sheets
Graphs of sales and profit are as follows:
2008 2009 2010 2011 2012 2013 2014 2015
0
500
1000
1500
2000
2500
Sales
Profit
2008
2009
2010
2011
2012
2013
2014
2015
0 500 1000 1500 2000 2500
Profit
Sales
Interpretation: Graphs or charts show that financial performance of Murano was good during
the period of last 8 years. Column graph shows increasing trend in both sales and profit level.
Sales revenue of Murano increased from £1300 to £2100 at the end of 2015. Due to existence
of positive correlation between both these factors or elements profit inclined from £320 to
£550 in the year of 2015. Hence, it presents that each year customers of restaurant were
increased which in turn resulted into high sales and profit (Krol, 2017).

3.2 Creating a trend line for evaluating future growth and performance
Trend Line: It may be served as a technical analysis tool which in turn assists
business unit in both assessing and confirming trend (Sperl-Hillen and et.al. 2016). The
below mentioned trend lines entails that there is high level of possibilities in relation to the
maximization of both sales revenue and profit level. Thus, by considering such trend it is
advised to Murano to open another restaurant. Moreover, enhancement of customer base,
sales and profit margin is the main objective of firm behind expansion. Hence, owner of
Murano can fulfill its aims and objectives on the basis of futuretrends or aspects.
2008 2009 2010 2011 2012 2013 2014 2015
0
500
1000
1500
2000
2500
f(x) = 94.9761904761905 x + 1222.35714285714
f(x) = 28.5714285714286 x + 301.428571428571
Sales
Linear (Sales)
Profit
Linear (Profit )
3.3 Preparation of power point for the effectual disclosure and dissemination of information

3.4 Producing a formal business report
To,
The management,
Murano, London
Date: 10th March, 2017
Subject: Expansion plan of restaurant
 Introduction: Researcher has conducted investigation with the motive to get
information about the extent to which expansion plan will be suitable. In this, report
will provide information about the customer’s attitude towards the services of Murano
and financial movements.
 Methodologies: In order to get information about the customer’s expectation primary
data has been gathered through survey. Further, to assess the financial trend sales and
profit data of Murano pertaining to 8 years have been gathered and analyzed.
 Findings: From investigation outcome it is reported to higher management business
unit had generate enough sales revenue and profit margin by offering dinning
services to the customers. Hence, such increasing pattern of financial performance
shows that customers are highly satisfied from the services of restaurant. Further,
incline which take place in the monetary aspect presents that customers more
frequently dine with Murano. Besides this, on the basis of results on trend line it is
suggested to the owner of restaurant to execute the plan of expansion. Moreover, in
the upcoming time period both sales and margin of the restaurant will increase to a
great extent. This is positive indicator which entails by establishing second restaurant
in London Murano can widen its business operations and functions more effectually.
 Conclusion and recommendations: By considering all the statistical analysis it can be
stated that expansion plan will prove to more beneficial for Murano in terms of both
monetary and non-monetary. It can be concluded from the evaluation that both sales
and profit margin of the firm will increase in the near future. Besides this, it can be
summarized from the survey results that customers are highly satisfied from the
services of Murano. From overall evaluation it is recommended to the business unit
that there is need to place emphasis on the promotional aspects which in turn helps in
enhancing sales. Further, it is suggested to the manager of Murano that it should
invest money in expansion project that aid in the profitability of firm.
Sincerely ,
Research analyst

4.1 Use appropriate information processing tools for decision making
Information processing (IP) systems: IP implies for the manipulation of numeric
information through the means of computers and other electrical equipment. It includes
software such as MIS, DSS, TPS which in turn helps in simplifying the large data set and
thereby helps in presenting suitable solution of issue. All such IP systems are highly
significant which in turn aid in the decision making aspect and thereby contributes in the
organizational success.
Types of systems:
1. Management information system: MIS is the most effectual software which in turn
aid in strategic decision making. Such software assists business unit in taking highly
profitable decision by summarizing the large data set (Management Information
system, 2017). Hence, research and owner of restaurant can take suitable decision
about investment, equipment and business processes through MIS and thereby gains
benefit from it.
2. Decision support system:This software is undertaken by operational level managers
for taking decision in relation to the problems which are not changing quickly
(Ampatzidis and et.al.2016). Hence, by using such software business entity can take
suitable decision about inventory etc.
3. Transaction processing system: In accordance with such information processing tool
restaurant owner maintains the record of each business transaction (Larson and et.al.,
2016). Hence, middle level personnel or manager of restaurant can develop competent
strategies and policies that make contribution in the attainment of organizational
goals.
4.2 Preparation of project plan and determination of critical path
Activities for the expansion of restaurant
S. No. Activities Immediate
predecessors
Duration (in days)
1. Preparation of brief plan by
setting of aims and objectives
- 7
2. Conducting evaluation of books,
scholarly articles and government
1 10

reports to develop understanding
about research area
3. Collecting primary data through
the means of questionnaire
2 12
4. Summarizing, analyzing and
evaluating data
2 & 3 14
5. Setting of budgeting framework 3 & 4 8
6. Opening up restaurant 5 20
7. Assessing gap and make
modifications
6 6
8. Applying changes 7 8
Network diagram
Critical path:
Path 1: 1 + 2 + 3 + 4 + 5 + 6 + 7 + 8
Duration: 85 days
Path 2: 1 + 2 + 4 + 5 + 6 + 7 + 8
= 73 days
Path 3: 1 + 2 + 3 + 5 + 6 + 7 + 8
= 71 days
Explain the outcome of critical path value
By applying the techniques of project management it has been assessed that business entity of
Murano should go with path 3 which in turn helps in opening up restaurant within the less
time frame.

4.3 Using financial tools for decision making
On the basis of cited case situation, restaurant owner is planning to invest £190000 in
London. In this, by applying the tools and techniques of investment appraisal business entity
can determine the extent to which project is financially viable or attractive. Thus, by making
assessment of return owner of Murano would become able to select suitable for investment
purpose.
NPV = Total discounted cash inflow – initial investment
IRR = R1 + ((NPV1 x (R2 - R1)) / (NPV1 - NPV2))
Calculation of NPV
Year
Cash
inflo
w (in
£)
PV
factor
@
12%
Discoun
ted cash
inflow
1
5000
0 0.893 44642.9
2
6400
0 0.797 51020.4
3
5800
0 0.712 41283.3
4
7000
0 0.636 44486.3
Total
discounte
d cash
inflow
181433
Initial
investme
nt
190000
NPV
(Sum of
Discount
ed cash
inflow -
initial
-8567.2

investme
nt)
Calculation of IRR
Year
Cash
inflow
(in £)
1 50000
2 64000
3 58000
4 70000
IRR 10%
Analysis and Recommendations: The above mentioned table presents that proposal with the
initial investment of £190000 will offer negative return to the restaurant such as £8567.2
respectively. Hence, by applying the time value of money concept and PV factors of 12% it
has been identified restaurant owner will not generate positive returns after the period of four
years. Along with this, IRR is only 10% which shows that such proposal will not offer higher
return to the business entity. Moreover, it is highly lower as compared to industry average
which indicates that such project will not in the profitability aspect of restaurant. By
considering all the aspects it is recommended to the owner of Murano to avoid such proposal
and makes effort in relation to finding other one.
CONCLUSION
From this report, it has been articulated that customers will like to go to the other
restaurant of Murano. Further, rise in the disposable income and thereby standard of living
also gives positive indicator regarding the growth of restaurant sector. Besides this, it can be

revealed from the report that both primary and secondary data sources have been employed
by the scholar to assess suitable solution of research issue. It can be seen in the report that
sales revenue and profitability of Murano was good in the past years. From trend line, it has
been concluded that in the near future both sales revenue and profit margin will incline in the
upcoming time period. Thus, it is not financially viable for restaurant to open new branch
because negative returns are associated with such proposal. Hence, owner of restaurant
should make focus on alternatives which are available to it.
REFERENCES
Books and Journals
Ampatzidis, Y. and et.al., 2016. Cloud-based harvest management information system for
hand-harvested specialty crops. Computers and Electronics in Agriculture, 122, pp.161-
167.
Anderson, D. R. and et.al., 2016. Statistics for business & economics. Nelson Education.
Chiou, C.C. and Wang, Y.M., 2016. The Comparative Effect of Computer-Assisted
Collaborative and Individual Concept Mapping on Enhancing Business Statistics Learning
Achievement: The Role of Students’ Cognitive Style. Abstract of Business Strategy and
Social Sciences.5.
Huang, L., Critchley, L.A. and Zhang, J., 2016. Erratum to: Does using two Doppler cardiac
output monitors in tandem provide a reliable trend line of changes for validation
studies?.Journal of clinical monitoring and computing.30(5). pp.747-747.
Jaggia, S. and et.al., 2016. Essentials of business statistics: communicating with numbers.
McGraw-Hill Education.
Krol, R., 2017. Economic Policy Uncertainty and Small Business Decisions. Cato
Journal.37(1). p.59.