Business Decision Making: Analysis of Data for Strategic Decisions

This report delves into the critical aspects of business decision-making, encompassing various stages from data collection to strategic implementation. It outlines a plan for gathering both primary and secondary data, emphasizing the use of questionnaires and online surveys. The report details surv...Read More

BUSINESS DECISION-MAKING
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Table of Contents
INTRODUCTION ...............................................................................................................................3
TASK 1 ABILITY TO USE VARIETY OF SOURCES FOR DATA COLLECTION ........................3
1.1 Plan for collection of primary and secondary data ..................................................................3
1.2 Survey methodology and sampling frame used.........................................................................3
1.3 Sample questionnaire for the purpose of research ....................................................................4
TASK 2: UNDERSTANDING RANGE OF TECHNIQUES TO ANALYSE DATA.........................6
2.1, 2.2 Calculation of mean, mode and median .............................................................................6
2.3 Calculation of range, standard deviation, quartile.....................................................................6
2.4 Calculation of correlation coefficient .......................................................................................7
TASK 3 Producing information in appropriate formats for decision making ....................................8
3.1, 4.1 Line/ Bar graphs using spreadsheets...................................................................................8
3.2 Trend lines using spreadsheet for sales, costs and profit .........................................................9
3.3 PPT...........................................................................................................................................10
3.4 Formal business report ............................................................................................................10
TASK 4: Be ability to use software generated information to make decisions .................................11
4.2 Calculation of project duration and critical path .....................................................................11
TASK 5 Ability to use software generated information to make decisions .......................................13
4.3 Calculation of payback, IRR and NPV for two projects..........................................................13
Conclusion ........................................................................................................................................14
REFERENCES...................................................................................................................................15
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INTRODUCTION
Business decision making plays most crucial role in organization as management has to take
various decisions which are associated with overall growth and development of enterprise. Further,
without conducting market research it is not at all possible for company to take decisions as
knowledge in various areas is necessarily required (Ferrell and Fraedrich, 2014). Apart from this
survey is carried out and sample size is selected so that adequate amount of data can be collected
easily and in turn it supports firm in taking appropriate decisions. The present study being carried
out is based on different scenarios given where decisions have to be taken by company in various
areas. Various tasks have been covered in the study which involves plan for collection of primary
and secondary information, survey methodology, investment appraisal techniques etc.
TASK 1 ABILITY TO USE VARIETY OF SOURCES FOR DATA
COLLECTION
1.1 Plan for collection of primary and secondary data
In the present scenario company is planning to launch new brand of trainers in the market
and the new brand will be totally based on the unique design through which both men and women
will be targeted. Therefore, in order to obtain knowledge regarding taste and preference of target
market in relation with designs from graffiti artists information has been collected from both
primary and secondary sources (Black, 2011). For collection of primary information well designed
questionnaire has been developed keeping in view the aim of the company. With the help of primary
information it is possible to know about expectations of the target market and on this basis products
can be delivered to customers. Apart from this, collection of secondary information is also
necessary and for obtaining information various books, journals and online articles will be refereed
so that adequate amount of information can be gained easily. Collection of both primary and
secondary information will assist in knowing what kind of designs are preferred by target market
and same can be used for firm for attracting its customers (Zsambok and Klein, 2014). The primary
data will be collected from people of UK in which they will asked about the design and colour
combination which they prefer in Graffiti. This will help in understanding the need and preference
of people in the market. The data collected from primary sources will supports in developing the
new brands trainers in more effective manner. On the other hand, the information collected form
secondary sources will be regarding the taste and demand of people in the market. The information
will be gathered in terms of what are the design preferred by individuals and how to develop the
same.
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1.2 Survey methodology and sampling frame used
In order to collect information from the sources selected it is necessary to carry out survey in
appropriate manner so that right data can be gained easily. Further, main reason behind conducting
survey is to know expectations of customers in relation with designs from graffiti artist and through
this it is possible for business enterprise to target both men and women (Pettigrew, 2014). Apart
from this, online survey has been carried out where email id of customers have been obtained and
questionnaire has been sent to their id. Moreover, sample size of 30 customers has been taken into
consideration and through this appropriate information can be gained easily. Main reason behind
selecting local people as respondents is that they can easily provide knowledge regarding the artistic
designs and on the basis of this wide range of products can be offered to target market as per their
expectations. This sample size has been considered in order to gain information about graffiti and
become aware of the fact that whether it is ethical or not. It will also helps in getting aware about
the future and scope of graffiti
1.3 Sample questionnaire for the purpose of research
Questionnaire
1. Name
2. Age
 18 to 25
 25 to 35
 35 to 45
 45 and above
3. Gender
 Male
 Female
4. Working status
 Employed
 Student
 Businessmen
5. Do you prefer to view places having designs from graffiti artist?
 Yes
 No
6. Do you have proper knowledge regarding graffiti artist in terms of range of designs?
 Yes
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 No
7. Which type of Graffiti art do you like the most?
 Michael. Jh
 Deuce 7
 Zevs
 Banksy
8. Different designs of Graffiti encourages you to try range of designs available?
 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree
9. Where have you seen the graffiti?
 Private venue
 Public area
10. What kind of private venue highlights graffiti art?
 Wall of apartments
 Gate of shops
 Others
11. Why do you think that graffiti is acceptable?
 Beautify the areas
 Trendy
 For entertainment
 It is a piece of art
12. Why do you think that graffiti is unacceptable?
 Damages public property
 Violate the law
 Anti tradition
13. In what kind of public area have you seen graffiti?
 Under the bridge
 Tunnel
 Pier
 Others
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14. Do you think graffiti in public area is acceptable?
 Yes
 No
. 15. Why do you like Graffiti
 Because it is fun
 It is exciting
 It is a form of being creative
16. what are your views regarding the future of graffiti
__________________________________________________________________________
TASK 2: UNDERSTANDING RANGE OF TECHNIQUES TO ANALYSE
DATA
2.1, 2.2 Calculation of mean, mode and median
Amount Spent
(£)
No. of
orders (f)
Mid
(x)
fx (x-m)^2 Cummulative
frequency
0-10 5 5 25 640.09 5
10-20 7 15 105 2992.09 12
20-30 10 25 250 39880.09 22
30-40 12 35 420 136678.1 34
40-50 14 45 630 336052.1 48
50-60 15 55 825 600160.1 63
60-70 14 65 910 739084.1 77
70-80 13 75 975 855070.1 90
80-90 6 85 510 211324.1 96
90-100 4 95 380 108702.1 100
Mean 50.3 50-60
Mode 15 50-60
Median 15 50-60
 Mean: Mean of set of data values is the sum of all the values which is divided by the
number of data values (Bojadziev and Bojadziev, 2007). For the present data available its
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mean is 50.3 which is the average of all numbers.
= = 5030/100 = 50.3 Mode: Mode of set of data values is the value which occurs most often (Mean, Median,
Mode, and Range, 2014). In the present scenario mode for the given data is 15.
L +
 Median: Median of set of data value is the middle value of data set which has been arranged
in the ascending order (Triantaphyllou, 2013). Median for the given set of data is 15.
L +
After analysing calculations done it has been found that most popular price for orders over
the last month is 50 to 60 as in this range number of orders were maximum as compared with other
range.
2.3 Calculation of range, standard deviation, quartile
Range 100-0 = 100
Standard
deviation 24.39
percentile 25 5.75
percentile 75 14
inter 14-5.75 = 8.25
Standard deviation
For the information collected it has been found that range of data is 11 which is the
difference between highest and lowest value. Standard deviation for the data analysed is 24.39
which represents how spread out numbers are in a given set of information (Bazerman and Moore,
2012). It is the square root of variance. Lower quartile calculated for the given set of information is
5.75 and upper quartile value is 14. Further, inter quartile range for the data present is 8.25 and it
supports in measuring the variability which is based on dividing a data set into quartiles. So, all
these figures are representing favourable results and it has been found that sales of Karen are
increasing at faster pace and business is operating efficiently. Apart from this, it is expected that
sales volume will rise in near future and through this business can earn higher profits (Decision
making, 2015).
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2.4 Calculation of correlation coefficient
Temperature Sales
22 325
26 416
13 197
19 264
11 175
17 248
27 435
Temperature Sales
Tempera
ture 1
Sales
0.98733308
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Correlation coefficient is regarded as the measure with the help of which it is possible to
identify the degree to which two variable movements are associated (O’Fallon and Butterfield,
2005). For the information collected coefficient of correlation is showing positive results and this
indicates direct relationship between sales and temperature. Apart from this it is showing
relationship between the two variables present in the study.
TASK 3 Producing information in appropriate formats for decision making
3.1, 4.1 Line/ Bar graphs using spreadsheets
Year Sales (£000)- All regions All cost (£000) Final profit (£000)
2000 170 140 30
2001 190 130 60
2002 230 150 80
2003 240 150 90
2004 320 180 140
2005 340 180 160
2006 270 170 100
2007 250 150 100
2008 250 180 70
2009 260 160 100
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2010 300 160 140
Above shown are the Line and bar graph which shows sales, cost and overall profitability of
the organization. Further, through this overall position of omega consultants can be known easily.
Overall sales of firm is rising at faster pace and it is representing efficiency of company in carrying
out overall operations in the market (Snowden and Boone, 2007). Further, major cost associated
with the firm are not stable as they are changing every year. Apart from this profit level has also
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risen as compared with past but it is also fluctuating as in the year 2008 profitability level was less
as compared with the other years and due to this reason it is required for management to control
major expenses so that profitability level can be easily enhanced with the help of this and in turn
organization can improve overall performance in the market.
3.2 Trend lines using spreadsheet for sales, costs and profit
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Above shown is the trend line for sales, profit and cost associated with the company. All the
trend lines are representing favourable results which it is expected that overall sales of firm will rise
in near future, cost will increase with the rise in production level (Saaty, 2008). Moreover, it is
expected that profitability level of enterprise will increase as sales of company are rising at faster
pace and in turn it is beneficial for management in every possible manner.
3.3 PPT
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3.4 Formal business report
To, The managing director
Subject: Relationship between sales, cost and profit
Status: Confidential
Date: 4th November 2015
Introduction
In order to analyse overall performance of Omega consultant limited different variables have been
considered such as sales, cost and profit. Sales figure of company are showing positive results
where sales are increasing at faster pace. In short demand for every type of product offered by
company is quite high and it is representing favourable results. Costs associated with production of
enterprise are not fixed and it is changing frequently. Apart from this due to rise in level of sales
profitability of company is increasing and it is fruitful for business. Moreover, their exist direct
relationship between sales, cost and profit of enterprise. When costs of producing goods is high
then it has direct impact on profit of firm and level of profitability declines. Further, if Omega
consultants wants to increase profit then it is necessary for management to decrease overall cost.
Apart from this rise in level of sales has enhanced profitability of the business which is fruitful for
company. On the other hand to determine overall position of company in near future forecasting
has been done as through this it has been known whether sales, profitability and overall costs of
company will rise in near future or not. This shows the major importance of forecasting along with
its benefits.
Findings
Through the Line and bar graph prepared it has been found that company is earning higher profits
by carrying out overall operations and sales volume is also high. Apart from this, major costs
associated with the business are also rising and this can lead to decline in profitability level.
Therefore, it is required to take appropriate actions so that overall sales of the company can
enhanced through this.
Conclusion
From the overall analysis it has been found that performance of omega consultants in the market is
up to the mark but there is a need for management to control major costs so that profitability level
can be enhanced easily. Trend lines have shown that profitability level of company can enhance in
near future and this can assist in accomplishment of overall aims along with objectives of the firm.
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TASK 4: Be ability to use software generated information to make decisions
4.2 Calculation of project duration and critical path
Task Name Duration Activity Predecess
ors
1 A 4 days Preparation
2 B 2 days Business planning 1
3 C 36 days Recruitment and
selection 1
4 D 15 days Installation of
peripherals 2
5 E 4 days Initial training 4
6 F 9 days Design 5
7 G 9 days Conversion 6
8 H 2 days Development of
norms 3
9 I 10 days Assessment 2
10 J 9 days Continuous testing 4
11 K 20 days Policy
documentation 7,8,9,10
12 L 20 days Appraisal 11
Activity
Early
Start Early Finish Late Start
Late
Finish
A 0 4 0 4
B 4 6 4 6
C 4 40 5 41
D 6 21 6 21
E 21 25 21 25
F 25 34 25 34
G 34 43 34 43
H 40 42 41 43
I 6 16 33 43
J 21 30 34 43
K 43 63 43 63
L 63 83 63 83
Project 83
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Critical path: 1,2,4,5,6,7,11 and 12
Project duration: 4+2+15+4+9+9+20+20 = 83 days.
Above shown in the critical path of project where in the time period of 83 days the entire
project can be completed and it is beneficial for the entire business. Critical path is considered as
the shortest path and by following this path it is possible for company to focus on its key activities
for attainment of goals.
TASK 5 Ability to use software generated information to make decisions
4.3 Calculation of payback, IRR and NPV for two projects
In order to determine feasibility of the two projects named super and sonic investment
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appraisal technique has been applied and through this funds can be easily allocated in the project
which is profitable for business (Dew, Sarasvathy and Wiltbank, 2009).
Year
Project Super Cash
flow (£)
Project Sonic Cash flow
(£)
Investment -200000 -200000
1 35000 218000
2 80000 10000
3 90000 10000
4 75000 4000
5 20000 3000
NPV
(Discount
factor 10%) £26,542.41 £16,867.50
IRR 16% 19%
Payback
2+(115000/205000) =
2.56 years
After applying investment appraisal techniques it has been found that project super is more
feasible for company as it is having higher net present value. Further, internal rate of return of
project is also low and in the time period of 2.56 years the entire amount can be easily recovered by
enterprise. This is directly representing the feasibility of the project and in turn it is fruitful for
business to allocate funds in it.
Report to board of directors
To, Board of directors
Subject: Regrading investment decision in projects
Date: 4th November 2015
In order to know feasibility of the projects named super and sonic investment appraisal
technique has been applied which are NPV, payback and IRR. By applying all these three
techniques it has been found that super project is feasible for firm as it is having higher payback
period along with net present value. It is highly beneficial to allocate funds in this project as major
cost of investment can be recovered easily and it is possible to enhance the profitability level. Due
to presence of higher net present value and payback period this project has been selected and sonic
as a proposal has been rejected for firm. NPV value of project Super is much more higher as
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compared with sonic and its internal rate of return is also low. This is the main reason behind
section of this project as company can obtain higher return and this can enhance profitability level
of the enterprise. In short the entire amount of investment can be recovered in short period of time.
CONCLUSION
From the entire study being carried out it has been found that to take correct decision is
significant for every organization as through this firm can easily grow. Further, with the help of
graphs prepared overall position of Omega consultants has been determined and firm is operating
efficiently. Investment appraisal techniques applied has supported local construction company in
taking decision and firm can allocate funds in the project so as to obtain higher return keeping in
view overall aims and objectives of the study. Apart from this, through project management tool ace
investment ltd can easily take decision as it has supported in knowing the time period in which
entire project can be completed and in short period of time.
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