Business Decision Making Models

This assignment delves into the realm of business decision making, examining diverse models and approaches employed in contemporary organizations. It covers topics such as multi-criteria decision making, heuristic decision making, and the influence of organizational ethics on decision processes. The study analyzes relevant research papers and online resources to provide a comprehensive understanding of the theoretical frameworks and practical applications underpinning effective business decision making.

BUSINESS DECISION
MAKING

INTRODUCTION
The decision making process of any company or organization is an important aspect in
order to develop of business. For achieving organizational or managerial objectives or goals, a
decision is a course of action that is take from set of alternative options. It is a continuous and
indispensable element for managing any activities of business or organization. Thomas Cook is
tourism company in the United kingdom. This company wants to collect relevant data by using
appropriate tools and techniques. In this modern world, there are many organizations that make
use of facts and figures so that management will be able to make effective decision. Further, to
get understanding and effective decision, management make use of statistical tools. These are
helpful enough to measure the performance of the firm. Data which has gathered from the
questionnaires have been interpreted in the report.
TASK 1
1.1 Sources of data collection for the development of business
Collection of data and information can be done by various sources for conducting a
research. Mainly, there are two different type of techniques for collection of data, they are
Primary sources and Secondary sources. Generally, the company such as Thomas Cook has used
these two sources for generating better results(Zsambok and Klein, 2014). Primary data type is a
set of facts and figures which is never collected by anyone before and also has not been
published in any book, journal, magazines etc. It is also known as first hand data collection
technique which is mostly consists of set of questionnaires. On the other side, the secondary data
is that which has already been collected by someone else and published in some books, journals
or magazines.
The information related to facts and figures that has collected from internet are also
covered in the secondary sources. Both types of data collection sources are essential for the
research purpose. The researcher can take review of past data and get idea of conducting a
research. Therefore, both types of data sources persist great importance. In order to conduct this
research for Thomas Cook, the secondary data has collected from books, journals and
magazines(Pettigrew, 2014). And for primary data, sample of 90 customers will be taken into
consideration. The company is planning for four different tours that are Morocco, Turkey, Cuba
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and Dubai. And they wants to know that customer would prefer for these tours or not. For this
purpose they are doing research.
The list of type of data required are as follows:
 Age-groups
 Costomer profile
 Preference
 Attitude
 Buying behaviour
1.2 Survey methodology and sampling techniques
Survey methodology:
Survey methodology can be determined as the study in which individual units from
particular associated survey data or population is collected. For this purpose, there are various
strategies used which are questionnaire and methods for improving the number and accuracy of
responds to surveys(Nowduri, 2011). Majorly there are four methods for collection of data with
the help of Survey Methods. In this context, it includes interview through electronic, telephonic,
personal interview and mail interview. For this survey the company has gone with personal and
mail interview.
Personal interviewing This is the most versatile from the all methods.
It is also termed as face-to-face survey(García-
Peñalvo and Conde, 2014). This type of survey
method is used when a specific target
population is involved. The main aim of this
method is to explore the responses of the
people to gather more and deeper information.
Mail interviewing The email survey means the survey instrument
like questionnaire is send to the respondent
through email. It can reach all types of people.
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Sampling techniques:
In order to conduct a research, it becomes essential to identify the the sample units. The
conclusion which is made for sample then it will represent the entire population(Ho, Xu and
Dey, 2010). The sampling techniques which has used in this survey are simple random sampling
and convenience sampling.
Simple random sampling This method is generally used in the research
in which sample units are to be taken on the
random basis from population. When specific
type of sample is not required in the research
for data collection then this technique is good.
And in our research, it is required to analyse
the buying behaviour of the people.
Convenience sampling In this method the sample units are to be taken
from the population on the basis of
convenience of researcher. Therefore, many of
the researchers prefer to follow this method for
collecting data.
1.3 Questionnaire for the survey
Name:
Gender:
 Male
 Female
Marital status:
 Married
 Unmarried
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 Divorced
Q.1 Age-groups
 Below 20 years
 20 to 30 years
 30 to 40 years
 40 to 50 years
 50 to 60 years
 60 to 70 years
 Above 70 years
Q.2 Are you satisfied with the existing range of tours offered by our company?
 Strongly agree
 Disagreeing
 Neutral
 Agree
 Strongly agree
Q.3 How many tours have you bought from us?
 1
 2
 3
 4
 More than 4
Q.4 Would you purchase tour to destination A (Morocco)?
 Strongly agree
 Disagreeing
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 Neutral
 Agree
 Strongly agree
Q.5 How much are you prepared to pay for tour A (per person)?
 £ 600 but less than 625
 £ 625 but less than 650
 £ 650 but less than 675
 £675 but less than 700
 £ 700 but less than 725
Q.6 Would you purchase tour to destination B (Turkey)?
 Strongly agree
 Disagreeing
 Neutral
 Agree
 Strongly agree
Q.7 How much are you prepared to pay for tour B (per person)?
 £ 600 but less than 625
 £ 625 but less than 650
 £ 650 but less than 675
 £675 but less than 700
 £ 700 but less than 725
Q.8 Would you purchase tour to destination C (Cuba)?
 Strongly agree
 Disagreeing
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 Neutral
 Agree
 Strongly agree
Q.9 How much are you prepared to pay for tour C (per person)?
 £ 800 but less than 825
 £ 825 but less than 850
 £ 850 but less than 875
 £ 875 but less than 900
 £ 900 but less than 925
Q.10 Would you purchase tour to destination D (Dubai)?
 Strongly agree
 Disagreeing
 Neutral
 Agree
 Strongly agree
Q.11 How much are you prepared to pay for tour D (per person)?
 £ 900 but less than 925
 £ 925 but less than 950
 £ 950 but less than 975
 £ 975 but less than 1000
 £ 1000 but less than 1025
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TASK 2
12.1 Information by summarising the raw data
The raw data is to be summarized through the statistical tools which are mean, mode and
median.
Mean The regular meaning of median is average. It is
a statistical tool which reflects the average
performance of the particular variable(Mean,
Median, Mode and Range. 2017). It is
calculated by dividing the total of all the values
by the number of values. It is the most
common and popular way to measure the
average value.
Median The median of raw data shows the middle
value. In the calculation of median the data
should first be arranged in order from lowest to
the highest value. All data should be in
numerical form. If there is an odd number of
outcomes, then the mid value is median. And if
the number is even then the median will be the
mean of two middle numbers.
Mode Mode indicates the most often used option.
The most repeated value is to be determined in
mode. If the mode is zero then this shows that
none of values of variable is repeating again
and again in the data set.
2.2 Interpretation of results to draw conclusions
Existing price range Number of tours bought
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Mean 4.3 3.4
Median 5 3
Mode 5 5
Mean – The mean value of existing range of tour which are offered by Thomas Cook is 4.3
which indicates that customers are agree as they are satisfied with the price range of the
company. The mean for number of tours bought is 3.4 that means customers purchase the tour
package in an average three times.
Median – The median of existing price range is 5 that means the mid value is strong agree as per
the data. The median of number of tours bought by the customers is 3 which shows that the
frequency of purchasing of tours is three.
Mode – The mode for existing price range is 5 that means customers are repeatedly choose the
strongly agree option. The mode for number of tours bought is 5 that means most of the
customers are purchased the tour package more than four times.
2.3 Analyse data by using measure of dispersion
Standard Deviation:
The standard deviation can be determined as tool that is used to measure the dispersion
that is being calculated form of a set of data from its mean. However, there are conditions in
which the data point is away from the mean. In such condition there are higher divination that is
found within the set of data. Further, it can also be calculated with the help of square root of
variance. This is derived and determined by the variation between each data point relative to the
mean (Vercellis, 2011). The overall standard deviation indicates that the most of the customers
have given the average response to the questions. Commonly it can be that deviation is high in
relation the mean values.
2.4 Quartile and Percentile for decision making
Table 1: Quartile and Percentile for decision making
Quartile The range of data is divided into four equal
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parts. The first quartile (lower) is the number
below 25% of bottom data. The second quartile
(median) is valued at 50% of the data below it.
The third (upper) one has 75% of the data
below it. And The top 25% of data above it.
Percentile This can be determined as term which is used
each and every day but it does not have a
proper definition (Hwang and Yoon, 2012). In
order words, it can be stated that as a number
in which percentage of score fall below
percentile.
–
–
These are the tools which helps in decision making for the packaged tour market of Thomas
Cook company.
TASK-3
3.1 Graphical presentation
Existing sales of tours (£000s)
Appendix B sale
201
4 2015 2016
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Destinations in Southern Europe 234 323 350 123 243 325 375 130 250 330 360 140
Destinations in Africa and
Middle East 105 120 130 75 108 122 131 76 108 123 132 80
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Destinations in Asia 409 290 280 350 420 309 300 375 450 334 323 380
Destinations in South America 23 30 34 25 25 32 34 26 26 33 35 27
Destinations in North America 110 134 234 100 109 145 245 120 120 150 260 140
Other Destinations 50 62 76 40 52 64 78 42 54 65 79 44
Interpretation – In this graph there are many sales of the different year are calculated and in this
present the sale are increase at the same time that they (Aharoni, Tihanyi, and Connelly,
2011)reflect the profit of the company when the turnover increase the sale and profit is also
increased at that same it is concluded that the sale may reflect the company and the turnover is
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Destinations in Southern Europe
Destinations in Africa and Middle East
Destinations in Asia
Destinations in South America
Destinations in North America
Other Destinations
0
100
200
300
400
500
Q1
2014 Q2
sale Q3
Q4
Q1
2015 Q2
Q3
Q4
Q1
2016 Q2
Q3
Q4

depended on the cost of production which calculated by the company and also calculated in the
term of business
3.2 Present sale of trend analysis
Total
Sales
Q1 Q2 Q3 Q4
2014 931 959 1104 713
2015 957 997 1163 769
2016 1008 1035 1189 811
Interpretation – In this graph the researcher present and also estimated the sale in
2014,2015,2016 it is the type that reflect the sale is some time increase and together it is
decreasing the amount of the business and it increases the variable and fixed cost of business that
reflect the profit and also company estimated the future demand and turnover of the
company(Brown, and et. al., 2010).
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1 2 3
0
500
1000
1500
2000
2500
Q1
Q2
Sales Q3
Q4

3.3 Covered in P PT
3.4 Formal business report
To,
Director of Thomas Ltd.
Date – 02.04.2017
This research was conclude the find out the opportunity in the UK market for tour travel agency and making
the chain in the market. In this data regard the primary and secondary data in the taking decision related to the
researcher and used in the collection of data. If the people are morn concern the price and they want the quality
product in cheaper cost(Gigerenzer, and Gaissmaier, 2011). In the secondary research tools are used the
collecting the information related to Mean, mode, Median, and other statical data in the business for generating
the condition of the UK market. It is find out that firm is giving excellent performance and in last two years
growth rate of increase in sales increase rapidly. At end of the report, on the basis of trend line and Gantt chart
used the setting and collecting information in the business. It is forecast that in future also firm sale will grow.
The firm also take the decision related to the past data and cash flow and ration analysis in the business. The
tour company also take the decision in the services and relate to the market that affect the business and share of
market condition and price of share(Gigerenzer, and Gaissmaier, 2011). The company used the creative and
innovative product in the market through the business decision.
TASK 4
4.1 Appropriate information tools
Following are the different tools used by the tor operator company increasing the profit
and satisfaction of the customer and also attract the consumer preferring the more services in the
business. MIS -It is the system used by the manager middle and top level to introducer the product
and services in the market(Elango, and et. al., 2010). In this system the help to manager
to take decision and help to introducer the innovative product in the market. It can be data
is stored and proceed the information in the raw material and process than take the output
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related to the business. There are the valuable data store and create the information
related the variables. Decision support system – This is the system that help the top level manager to taking the
decision in the appropriate ways and right time and take the decision according to
information and relate the way in the business(Milovic, and Milovic, 2012). It helps to
take decision relate the making policy and difficult decision making in the business in
critical situation. Hence, this information system has a great importance for the business
mangers and due to this reason it is widely used by the business mangers.
 Transaction process system – This is the system that the company used the TPS for
collecting the past data and also used the transfer the information in the business. They
can transfer the information relate to the involving the business development process and
include the collection, modification, retrieval of the all the transaction of the
data(Milovic, and Milovic, 2012). By evaluating this report the manager take the
decision for the revenues and income in the business and also calculate cost of operation.
Network diagram:
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Network diagram is the most effectual project management tool which in turn helps in
assessing suitable path. In other words, network diagram assists in selecting the mode which in
turn helps in completing the project within the less time frame. In the present times, business
entity can attain success in the competitive business arena only when it accomplishes project
within the specified time frame. On the basis of above mentioned network diagram business unit
should follow below mentioned critical path is enumerated below:
Critical path : 1 + 5 + 8+ 9 + 10
= 5 + 3 + 6 + 2 + 6
= 22 days
4.3 Project evaluation method
(A) Payback period method
Year
Cash
inflow
(Project
A)
Cumulative
cash
inflow
Cash
inflow
(Project
B)
Cumulative
cash
inflow
1 20000 20000 25000 25000
2 25000 45000 26000 51000
3 27000 72000 33000 84000
4 33000 105000 36000 120000
5 34000 139000 38000 158000
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Payback period
 Project A: 2 + 15000 / 27000
= 2.6 years
 Project B: 1 + 15000 / 26000
= 1.6 years
Payback period is the most effectual methods which in turn helps company in assessing
the time period within which it would become to cover amount invested on initial level. By
using this method, business entity can identify the time period after which it would become able
to generate profit margin. However, on the critical note it can be stated that payback method
offers solution without taking into account time value of money concept. The above mentioned
analysis presents that Thomas Cook should invest money in project b rather than others. In the
case of project A business entity will recover initial investment within 2 years and 6 months. On
the other side, in the case of project B payback period is 1.6 years. Thus, by investing money in
project B business entity would become able to get initial investment earlier.
Net Present value
Year
Cash
inflow
(Project
A)
PV
factor
@ 10%
Discounted
cash inflow
Cash
inflow
(Project
B)
PV
factor
@ 10%
Discounted
cash inflow
1 20000 0.909 18180 25000 0.909 22725
2 25000 0.826 20650 26000 0.826 21476
3 27000 0.751 20277 33000 0.751 24783
4 33000 0.683 22539 36000 0.683 24588
5 34000 0.621 21114 38000 0.621 23598
Total
discounted
cash
inflow 102760 117170
Initial
investment 60000 40000
NPV 42760 77170
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Interpretation – Net present value technique of investment appraisal helps in determining
suitable return which investor will earn from proposed investment. Such discounted cash flow
method assists in identifying the return associated with investment proposal on the basis of time
value of money concept (Milovic, and Milovic, 2012). It is one of the main aspects which in
turn enhance the significance of such method to a large extent. By applying the tools and
techniques of investment appraisal it has been identified that project B will offer high return such
as £77170 to Thomas Cook as compared to other investment proposal. Hence, by keeping such
aspect in mind it can be stated that Project B will prove to be more profitable for travel
organization.
(c) Internal rate of return
Project A Project B
Initial
investment -60000 -40000
1 20000 25000
2 25000 26000
3 27000 33000
4 33000 36000
5 34000 38000
IRR 32.48% 58.72%
Interpretation – IRR technique of capital budgeting shows return in the form of percentage
which business unit will generate from investment project. This method of investment appraisal
is highly significant because it provides solution by taking into account the time value of money
concept. IRR of project A and B is 32.48% & 58.72% significantly. By considering this, it can be
stated that owner of Thomas Cook should invest money in project B. Moreover, according to the
selection criteria company should invest money in the project which has high IRR.
CONCLUSION
From the above report, it has been concluded that to resolve research in an effectual way
data has been gathered by the researcher through both primary and secondary methods. Besides
this, it can be inferred that survey methodology provides deeper insight to the researcher and
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thereby helps in conducting investigation in the best possible way. By considering this, online
survey methodology has been selected by the researcher which in turn helps in saving time to a
great extent. It can be revealed from the report that by applying statistical tools and techniques
business entity of travel unit can take suitable business decision. It can be summarized that by
using project management tools and techniques firm can accomplish project within the specified
time frame. It can be seen in the report that investment appraisal tools and techniques help in
making selection of suitable project. By considering this, it is recommended to Thomas Cook to
invest money in proposal B which in turn contributes in the profit margin of firm.
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REFERENCES
Books and Journals
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business: A forty-five-year retrospective. Journal of World Business. 46(2). pp.135-142.
Brown, T. A., and et.al., 2010. Ethics and personality: Empathy and narcissism as moderators of
ethical decision making in business students. Journal of Education for Business. 85(4). pp.203-
208.
Elango, B., and et.al., 2010. Organizational ethics, individual ethics, and ethical intentions in
international decision-making. Journal of Business Ethics. 97(4). pp.543-561.
García-Peñalvo, F. J. and Conde, M. Á., 2014. Using informal learning for business decision
making and knowledge management. Journal of Business Research. 67(5). pp.686-691.
Gigerenzer, G. and Gaissmaier, W., 2011. Heuristic decision making. Annual review of
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Ho, W., Xu, X. and Dey, P. K., 2010. Multi-criteria decision making approaches for supplier
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pp.16-24.
Hwang, C. L. and Yoon, K., 2012. Multiple attribute decision making: methods and applications
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Milovic, B. and Milovic, M., 2012. Prediction and decision making in health care using data
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p.126.
Milovic, B. and Milovic, M., 2012. Prediction and decision making in health care using data
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p.126.
Nowduri, S., 2011. Management information systems and business decision making: review,
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Pettigrew, A. M., 2014. The politics of organizational decision-making. Routledge.
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