Business Decision Making Report: Crossrail Project and Carmen Project

This report delves into the intricacies of business decision-making, using the Crossrail project (a large-scale infrastructure endeavor) and the Carmen project (focusing on in-store promotion) as case studies. The report is structured into four tasks. Task 1 focuses on the background, rationale, objectives, and methodology of the research, including data collection methods, sampling techniques, and budget considerations. Task 2 involves descriptive data analysis, including mean, median, mode, range, standard deviation, percentiles, and correlation coefficients, applied to customer spending data. Task 3 covers graphical representations of data, such as line graphs and scatter plots, along with trend line analysis and the creation of business presentations and a formal business report. Task 4 encompasses project management techniques, including network diagrams, critical path analysis, Gantt charts, and the calculation of Net Present Value (NPV) and Internal Rate of Return (IRR) for project evaluation, culminating in recommendations for business strategies. The report integrates both qualitative and quantitative data analysis to provide a comprehensive understanding of the decision-making processes and project outcomes.

BUSINESS DECISION
MAKING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
Background of the study..............................................................................................................4
Rationale......................................................................................................................................4
Objectives of the research............................................................................................................5
Methodology................................................................................................................................5
Data analysis section....................................................................................................................5
Timeframe....................................................................................................................................5
Budget section for the research....................................................................................................6
Designing questionnaire..............................................................................................................6
TASK 2............................................................................................................................................8
Mean, median and mode..............................................................................................................8
Range and standard deviation......................................................................................................9
25th Percentile (Lower Quartile) and 75th Percentile (Upper Quartile) and explain the use of
Percentile...................................................................................................................................10
Interquartile range......................................................................................................................10
Correlation coefficient...............................................................................................................10
TASK 3..........................................................................................................................................11
Line graph..................................................................................................................................11
Scatter Plot on Advertising and Sales Costs..............................................................................13
Trend lines.................................................................................................................................14
Business presentation.................................................................................................................15
Formal business report...............................................................................................................15
TASK 4..........................................................................................................................................16

Task4 A..........................................................................................................................................16
Network diagram.......................................................................................................................16
Calculation of the project duration............................................................................................17
Critical path...............................................................................................................................19
Gantt chart and its benefits as a project management tool........................................................20
Task 4B..........................................................................................................................................20
1. Calculation of NPV and IRR of project A and B..................................................................20
2. Recommendations..................................................................................................................23
CONCLUSION..............................................................................................................................24

INTRODUCTION
Business decision making plays most crucial role as management of every enterprise has
to take different decisions which are linked with growth and development of firm (Hodge and
Austin, 2004.). Further, decisions can be linked with expansion; product development etc which
needs to be taken through proper analysis so that business can be positively benefitted with the
help of this. Moreover, entire process of decision making is supported by collection of primary
and secondary information and it is fruitful for business in every possible manner. Moreover, it
allows organization to easily operate in the competitive market for longer period of time. The
entire study being carried out is based on different scenarios where crossrail service project has
been undertaken which is associated with expansion, Carmen project which is associated with in
store promotion etc. In all the scenarios given business has to take appropriate decisions as they
are linked with development. Further, various tasks have been covered in the study which
involves collection of primary and secondary data, descriptive analysis, designing questionnaire
and budget section for the research.
TASK 1
Background of the study
The present case study provided is based on crossrail services expansion which is one of
the Europe’s largest construction projects which was started in the year May 2009. At present
around 10,000 people are working across 40 construction sites. Crossrail will transform rail
transport in London where capacity will be increased by 10% supporting regeneration and
cutting journey times across the city. Further, through this proper travelling facility will be
granted to around 1.5 million people with the aim to connect their key employment and other key
activities of business to large number of places such as Heathrow etc. It is expected that project
will start in the year 2018 and annual passengers will be 200 million. Funds allocated for
implementing project is £14.8bn.
Rationale
Rationale supports in knowing the main reason due to which the entire project has been
undertaken. So, the present project is based on analysis where government of UK is interested in
knowing the perceived benefit of cross rail project for local community. Regulatory authorities
have invested large amount for implementing this project but government is not at all sure that
weather will be beneficial for the entire community or not. Therefore, it is required for
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investigator to complete the entire project by evaluating the advantage of crossrail project for
local people living in the society and in other parts of the country. So, to examine the key
benefits of this project is one of the main reasons behind carrying out this study.
Objectives of the research
Following are the objectives set for conducting study and they are as follows:
 To identify the key benefits of Crossrail project for local community of central London
 To build research plan for carrying out the entire investigation process and collecting
primary along with secondary information linked with the project
 To estimate budget along with time required in accomplishing the project
Methodology
For conducting the study in appropriate manner data has been collected from both
sources named primary and secondary for the project of Crossrail. Further, both qualitative and
quantitative methods will be employed for the collection of crucial information. Moreover,
qualitative method is effective as through this it will be possible to know about the behavior of
local community towards Crossrail project. Apart from this, by using quantitative method
investigator can easily obtain data in numeric form and this can assist in knowing the real
benefits of this project for local people living in London (Sapsford and Jupp, 2006). Apart from
this method of qualitative study will support in carrying out survey of all the passengers in
appropriate manner. For collection of primary information investigator has designed
questionnaire keeping in view objectives of the study. Further, for collection of secondary
information various books, journals and online articles have been considered in order to know
the benefits of the Crossrail project.
Sample size of 50 local people has been undertaken from whom overall information has
been collected through which accurate information has been obtained which is fruitful for this
research. This sampling frame is appropriate for the present study as through this it is possible to
accomplish overall aim and objective of the research. On the other hand random sampling
technique has been used where respondents associated with the study have been selected
randomly and there is no such fix criteria present. The main reason behind undertaking this
sampling technique is that through this it is possible to obtain accurate amount of information
which is beneficial for the research. Sample size of 50 is appropriate enough in knowing that
Cross rail project is beneficial for the country like London or not.
2

Data analysis section
In the present study data has been analyzed by using both qualitative and quantitative
technique. Further, the information obtained will be analyzed by forming themes and using
statistical tools. By forming different themes it is possible to know about the response provided
by the respondents and is beneficial in every possible manner.
Timeframe
For conducting each and every activity in the project appropriate time is required and
through this efficiency of the study can be enhanced easily. Further, each and every activity in
the project has been highlighted with the help of Gantt chart and appropriate time frame has been
allocated. Gantt chart for the present project is as follows:
Activities/ duration in days 2 4 6 8 10 12 14 16
Analysis of background
Developing objectives for the
study
Selection of methodological
tools and techniques
Obtaining primary and
secondary information
Data analysis
Preparing budget for the entire
budget
Building research plan
Budget section for the research
Considering the present scenario of Crossrail project it is necessary to develop
appropriate budget so that funds allocated can be utilized in appropriate manner. Further, high
amount of investment is required so entire project will be carried out on large scale. So, the
proposed budget for this project is £1200. It will take into consideration large number of
activities such as research collection from primary and secondary data, fuel cost, miscellaneous
expenditure etc.
Expenses Amount
Research collection from secondary data £150
Research collection from Primary data £500
3

Stationary costs £200
Fuel Cost £150
Miscellaneous expenditure £200
Total £1000
Designing questionnaire
For collection of primary information it is necessary to design questionnaire so that
overall benefits from Crossrail project can be known easily and it can assist in implementation of
the project (Hadlock and Levine, 2004). Further, investigator has prepared questionnaire keeping
in view the objectives of the study and it has been shown below:
1. Name
2. Age
 18-25 years
 25-35 years
 35-45 years
 45 and above years
3. Gender
 Male
 Female
4. Are you aware about the Crossrail project
 Yes
 No
5. In your view what are the key benefits of Crossrail project?
 Improved connections
 Alteration in the way people travel around capital
 Reduced Journey time
 Easy congestion
6. Development of Crossrail project can assist in economic development?
 Strongly agree
 Agree
 Neutral
 Disagree
4

 Strongly disagree
7. Do you perceive that Crossrail project will enhance rail transportation and can reduce
journey time from one city to another?
 Yes
 No
8. Do you think that Crossrail project will link London’s key employment, leisure and other
business districts?
 Yes
 No
9. Do you perceive that Crossrail project will be more convenient for you?
 Yes
 No
10. Crossrail project will be an effective mode of transportation?
 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree
11. Do you think that Crossrail project will be cheap mode of transportation as compared
with others?
 Yes
 No
12. Does crossrail project will be beneficial for the environment?
 Yes
 No
13. Please provide recommendations for enhancing benefits of Crossrail project for local
community of London?
_____________________________________________________________________________________
______________________________________________________________________________
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TASK 2
Mean, median and mode
Amount Spent
(£)
No. of customers
(f) Mid- value(x) fx
Cumulative Frequency
(CF)
10-20 20 15 300 20
20-30 22 25 550 42
30-40 20 35 700 62
40-50 14 45 630 76
50-60 16 55 880 92
60-70 10 65 650 102
70-80 8 75 600 110
80-90 6 85 510 116
90-100 4 95 380 120
120 5200
Mean ∑FX/n 43.33
Median
L + (n/2-
CF)/f*h 39
Mode
Lmo + (Δ1/
Δ1 + Δ2) * i 25
Above shown is the descriptive analysis of the data present. Further, with the help of
elements present researcher can easily present reliable and valuable data and through this it is
possible to take appropriate decisions.
 Mean: It is regarded as sum of the data obtained with the help of both primary and
secondary sources. Further, as per the case provided descriptive analysis of customers
along with their actual spending on clothes have been calculated so that it is possible for
owner of Carmen clothing shop to take appropriate decisions linked with in store
promotion (Manikandan, 2011). Mean calculated of below £40 spending is 20.66 and it
is higher than the mean of above £40 spending that is 9.66.
Mean=A + ∑ fdx
N
6

 Mode: It is regarded as the number which frequently appears in a given set of data. From
the data analyzed it has been found that mode of below £40 spending is 40 as people
prefers to buy products as per their purchasing power. On the other hand mode of above
£40 spending cannot be calculated (Hodge and Austin, 2004).
Z=l+ f 1−f 0
2 f 1−fo−f 2 ×h
 Median: It is considered as the middle value in the given set of information. From the
information analyzed it has been found that median of data for the average spending of
below £40 is 20 and 14 for the above average spending of £40.
{(n + 1) ÷ 2}th
Range and standard deviation
Amount Spent
(£)
No. of customers
(f) Mid- value(x) X^2 fx^2 fx
10-20 20 15 225 4500 300
20-30 22 25 625 13750 550
30-40 20 35 1225 24500 700
40-50 14 45 2025 28350 630
50-60 16 55 3025 48400 880
60-70 10 65 4225 42250 650
70-80 8 75 5625 45000 600
80-90 6 85 7225 43350 510
90-100 4 95 9025 36100 380
120 495 33225
28620
0
520
0
Variance s2 = ∑Fx2 – ((∑Fx)2/n)/ n – 1
511.4
8
Std. deviation S= √s 2 22.61
Range
=
(100-(10/(20+1))-(10/(4+1))) 97.52
7

Through measure of dispersion it is possible for researcher to identify how spread out set
of information is in the given variables. Further, various elements of measure of dispersion are
present but for conducting the present research only two variables have been considered which
are range and standard deviation.
 Standard deviation: The ultimate reason behind calculating standard deviation is to
identify the amount of variation in a given set of information. Standard deviation for the
given set of information is 22.61 and through this it is possible for managers to know
whether to accept price below 40 or above it (Simanek, 2014).
 Range: It is the difference between highest and lowest value in a given set of
information. Range for below 40 average spending is 2 and above 40 average spending is
12.
25th Percentile (Lower Quartile) and 75th Percentile (Upper Quartile) and explain the use of
Percentile
Lower quartile/25th
percentile 24.5
Upper quartile/75th
percentile 58.8
From the information analyzed it has been found that lower quartile range for the given
set of data is 24.5 and it is representing the value of the middle of the first set where 25% of the
values are regarded to be smaller and 75% to be higher. Moreover, value of upper quartile is 58.8
and it is indicating value of the middle of the second set (Cumulative Frequency, Quartiles and
Percentiles. 2014).
Interquartile range
Value of interquartile range for the given set of data is 34.2 and it is the difference
between upper and lower quartile. It represents the dispersion of a data set.
Correlation coefficient
Sales Discount
1 0.974411
0.974411 1
From the additional information provided coefficient of correlation has been calculated
and through this it has been found that positive relationship exist between sales and discount as
8

rise level of discount enhances sales volume of the enterprise and vice versa. Therefore, through
descriptive analysis it is quite clear that in store promotion can be carried out by business and
through this business can easily earn higher profits by enhancing its sales volume (Correlation
coefficient. 2015). One of the key advantages of coefficient of correlation to business is that it
supports in understanding the real benefits between two variables and management can easily
analyze its overall performance through which corrective actions can also be taken if business is
not performing as per expected level (Ferrell and Fraedrich, 2014). So, in this way Correlation
coefficient provides advantage to business in every possible manner.
TASK 3
Line graph
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
0
1000
2000
3000
4000
5000
6000
7000
Line Graph
Advertising Cost £'000s Sales £'000s
Above shown is the line graph of advertising cost and sales which is representing positive
results as rise in advertising cost of the business is leading to rise in sales volume of enterprise.
Further, in case if organization has allocated more funds in advertising then in the same year
sales revenue of firm has enhanced which is profitable for company and in turn effective also as
overall expenses can be recovered easily.
Pie chart
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240
180160
140
130
Net Income Generated by 5 Branches
of the company in 2015
London Manchester Edinburgh Cardiff Liverpool
Bar chart
London Manchester Edinburgh Cardiff Liverpool
0
50
100
150
200
250 240
180 160 140 130
Net Income Generated by 5 Branches
of the company in 2015
Above shown is the Pie and bar chart of 5 branches of enterprise is representing that
overall income where income of London branch is high as compared with others. This high
income level is representing overall effectiveness of different branches in carrying out operations
in the market.
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2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
200 240 300 340 400 480 520 760 880 920 980 1020 1100 11701200 1400 1500 1800
2200 2300 2600 2800 2900 3100 3450 3600
4100
4670
Advertising and Sales data 2000-2013
Advertising Cost £'000s Sales £'000s
Scatter Plot on Advertising and Sales Costs
0 200 400 600 800 1000 1200 1400
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
Advertising and Sales data 2002-2015
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Trend lines
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
0
200
400
600
800
1000
1200
1400 f(x) = 197.035373272055 exp( 0.141751876255229 x )
R² = 0.958414260153368
Advertising Cost £'000s
Trend line of advertising cost has been developed and through this it can be said that by
increasing the overall cost of advertising in near future company can obtain large amount of
benefits as it can have positive impact on the sales volume of company. Apart from this, through
effective promotion it will become for enterprise to attract large number of customers and this
can assist in accomplishing overall long term objectives of the organization.
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
f(x) = 1198.88327524441 exp( 0.0975870724629485 x )
R² = 0.975259927654925
Sales £'000s
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Trend line of sales of organization is also showing positive results where rise in cost of
advertising will boost sales volume of business and through this company can earn higher profits
which are considered as one of the main objective of business behind carrying out overall
operations in the market. Overall growth in sales volume of business is beneficial for enterprise
in every possible manner. Therefore, it is recommended to business to focus on advertising tools
for enhancing overall performance in the market and grabbing opportunities.
Business presentation
Attached in PPT
Formal business report
To,
The Board of Directors
Subject: Report on performance of company
Introduction
In order to judge overall performance of enterprise sales and advertising data of firm has been
considered and through this it has been found that company is operating efficiently. Further, rise in
advertising cost is enhancing sales volume of the business and this is beneficial for the entire company.
Further, company is allocating more funds on advertising and this is effective as entire amount has been
recovered easily due to presence of higher sales volume.
Methodology
To judge overall performance of the business different charts have been prepared which involves
pie, bar, trend line etc and this has assisted in knowing that organization can earn easily increase its sales
volume in near future by spending more on advertisement. Further, it is one of the key benefits which
business is obtaining and can support in accomplishing the desired aims along with objectives of the
organization. Therefore, the methodology undertaken is effective and has supported in knowing the real
impact of rising advertising cost on sales volume of firm.
Conclusion
From the analysis done it has been found that rising advertising cost is fruitful for business.
Further, every brand is earning high income but of London’s branch it is quite high as compared with
others. Investment in advertisement and other type of promotional activities will be beneficial for
business and through this higher income can be earned easily. Apart from this, it will provide large
number of opportunities to business and firm can sustain in the market for longer period of time.
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TASK 4
Task4A
Network diagram
Network diagram is an effective tool of project management that helps in determining the
relationship between different activities of a project. This tool is also helpful in segmenting
whole plan within different activities (Morris, 2004). According to the case scenario,
organization wants to install a new computer program within existing system. The table below
shows the activities of along with a prepared network diagram:
Description Activity Preceding Activity (Days)
Physical preparation A - 4
Organizational planning B A 3
Personal selection C A 15
Equipment installation D B 10
Personnel training E D 4
Detailed system designing F E 6
File conversion G F 9
Establishment of standards H C 2
Program preparation I B 10
Program testing J D 9
Finishing Documentation K G,H,I,J 12
Follow Up L K 20
14

Illustration 1: Network diagram
Calculation of the project duration
Critical path of a project is helpful in calculating total duration of a project. For the
calculating of total duration of this project, the MS project tool is used (Van, Kurth- Nelson and
Redish, 2012). The diagram below represents the project duration along with a summary for the
whole project :
15

Illustration 1: Project summary
Table 1: Activity schedule
Task Name Duration Start Finish Predecessors
A 4 days Mon 12/7/15 Thu 12/10/15
B 3 days Fri 12/11/15 Tue 12/15/15 1
C 15 days Fri 12/11/15 Thu 12/31/15 1
D 10 days Wed 12/16/15 Tue 12/29/15 2
E 4 days Wed 12/30/15 Mon 1/4/16 4
16

F 6 days Tue 1/5/16 Tue 1/12/16 5
G 9 days Wed 1/13/16 Mon 1/25/16 6
H 2 days Fri 1/1/16 Mon 1/4/16 3
I 10 days Wed 12/16/15 Tue 12/29/15 2
J 9 days Wed 12/30/15 Mon 1/11/16 4
K 12 days Tue 1/26/16 Wed 2/10/16 7,8,9,10
L 20 days Thu 2/11/16 Wed 3/9/16 11
The total duration of a project is calculated to be 68 days. Within the given time frame ,
the organization will be able to install new computer program with the existing system.
Critical path
The proper estimation of project duration can be deciding with the help of critical path
which is considered as an important method to decide the most optical path to complete a
project. The calculation of longest path within minimum duration can be done by using critical
path. The network diagram and critical path are shown below:
Illustration 1: Critical activities are highlighted in red
The critical path of project is
A-B-D-E-F-G-K-L = 4+3+15+10+4+6+12+20= 68 Days
17

Gantt chart and its benefits as a project management tool
Gantt chart is an important tool of project management that helps in defining project
progress and supports in monitoring the entire project. This tool is significant used for measuring
different activities and respective duration. The benefits of these tools as a project management
tools is for analyzing the actual progress of a project. This tool is also helpful in monitoring and
controlling the different activities of projects. This defines a line of activities that are to be
completed after one another along with a time-frame (Ho, Liu and Tsay, 2008). The tool is also
helpful in managing time and cost of a project. Along with this, with the help of such tool a clear
relationship between different activities can be seen that is effective in making allocating
resources i.e time and cost, in the most effective manner. The Gantt chart for above mentioned
project is as follows:
Illustration 1: Gantt chart
Task 4B
1. Calculation of NPV and IRR of project A and B
Investment appraisal techniques are also known as capital budgeting techniques that are
used to identify the optimal project from the various alternatives. There are various investment
appraisal techniques that are used to assess the projects. These techniques are such as Net present
value method, Initial rate of return, Average rate of return and profitability index (Cohen and et.
18

al., 2013). This method is well used to identify the profitability of projects. Among these all, Net
present value is the most significant method that is used to identify the feasibility of project. This
method involves rime value or money in the evaluation of projects (Ryan, and Ryan, 2002.). Net
present value method and initial investment appraisal method are called to be discounted
methods. These are used to determine present value of the future cash flow for an investment.
Other methods are non-discounted method that does not focus on time value of money
(Advantages and disadvantages of Internal rate of return. 2010). This is the major reason for
which such methods are used for the investment purpose. In the given scenario, there are two
mutually exclusive projects that are having same initial investment and project life. The
discounting factor rate of return is 10%.
Year
Project A
Cash flow
Project B
Cash flow
Investment -200,000 -200,000
1 55,000 42,000
2 67,000 75,000
3 72,000 82,000
4 80,000 63,000
5 90,000 35,000
The calculations for NPV and IRR are shown below:
NPV for project A:
Net Present Value for project A
Years Cash
Inflow
Present value
@30%
Discounted
Cash Inflow @
10%
1 55,000 0.77 42350
2 67,000 0.59 39530
3 72,000 0.46 33120
80,000 0.35 28000
4 90,000 0.27 24300
Total Discounted Cash inflow 167300
Less: Initial Investments 200000
19

Net Present value -32700
NPV project B:
Net Present Value for Project B
Years Cash
Inflow
Present
value
@30%
Discounted Cash
Inflow @ 20 %
1 42,000 0.77 32340
2 75,000 0.59 44250
3 82,000 0.46 37720
63,000 0.35 22050
4 35,000 0.27 9450
Total Discounted Cash inflow 145810
Less: Initial Investments 200000
Net Present value -54190
From the above calculation, NPV of Project A is (32700), on the other hand NPV for
project B is (54190) it can be witnessed that Project A is having positive and higher NPV, hence,
it is recommended to be chosen.
Internal rate of return = lower discount rate + NPV at lower discount rate/ NPV at lower rate -
NPV at higher rate*(Higher discount rate – discount rate)
Project A = 0.10+69939/ (69939-(-32700))*(0.30-0.10)
= 23.63%
Project B = 0.10 + 26474/ (26474-(-54190) * (0.30-0.10)
= 16.56%
2. Recommendations
The company is recommended to choose project A for the investment propose as Project
A is feasible for the investment from NPV and IRR point of view. IRR for project A is higher as
compared to project B as well as NPV of project A is higher than project B hence, the projects
are to be chosen.
20