Business Decision Making: Statistical Tools and Analysis

This report delves into the application of statistical tools for effective business decision-making. It begins with data collection methods, including primary and secondary data, survey methodologies, and questionnaire design. The report then explores various statistical tools such as mean, median, mode, standard deviation, quartile, percentile, and correlation coefficients, illustrating their use through the analysis of sales data from Wm Morrison and its competitors. Furthermore, the report presents graphical representations of the data, including trend lines, and incorporates project evaluation techniques like ARR, NPV, and IRR to assess investment opportunities. A network diagram and Gantt chart are included to visualize project planning and execution. The report concludes with a summary of findings and recommendations, providing a comprehensive overview of how statistical analysis supports informed business decisions.

BUSINESS DECISION MAKING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
1.1 Collection of primary and secondary data........................................................................4
1.2 Survey methodology and sampling frame for the research .............................................4
1.3 Designing questionnaire for survey .................................................................................5
TASK 2............................................................................................................................................7
2.1 Statistical tools for the decision making...........................................................................7
2.2 Analysis of results............................................................................................................8
2.3 Analysis of data using measure of dispersion..................................................................9
2.4 Quartile, percentile and correlation coefficient uses in data analysis...........................10
TASK 3..........................................................................................................................................11
3.1 Graphs on information derived from business scenario ................................................11
3.2 Trend lines......................................................................................................................15
3.3 Covered in PPT...............................................................................................................18
3.4 Formal business report...................................................................................................18
TASK 4..........................................................................................................................................18
4.1 Information processing tools..........................................................................................18
4.2 Network diagram............................................................................................................19
4.3 Project evaluation techniques.........................................................................................20
CONCLUSION ............................................................................................................................22
REFERENCES..............................................................................................................................24
INDEX OF TABLES
Table 1: Calculation of mean, median and mode for Morrison and its competitors.......................8
Table 2: Percentage change in sales.................................................................................................9
Table 3: Calculation of standard deviation......................................................................................9
Table 4: Calculation of quartile and percentile..............................................................................10
Table 5: Calculation of correlation................................................................................................10
Table 6: Percentage change in JS Sainsbury's sales revenue for FY 2009-13...............................13
Table 7: Percentage change in Lidl sales revenue.........................................................................14
Table 8: Sales revenue of Aldi.......................................................................................................15
Table 9: ARR of projects...............................................................................................................22

Table 10: NPV of Project A&B.....................................................................................................23
Table 11: IRR of projects...............................................................................................................24
ILLUSTRATION INDEX
Illustration 1: Wm Morrison's sales revenue.................................................................................11
Illustration 2: Sales revenue of JS Sainsbury's..............................................................................13
Illustration 3: Sales revenue of Lidl from FY 2009- 2013.............................................................14
Illustration 4: Sales revenue of Aldi..............................................................................................15
Illustration 5: Trend line on Wm Morrison....................................................................................16
Illustration 6: Trend line of JS Sainsbury's....................................................................................18
Illustration 7: Lidl trend line..........................................................................................................19
Illustration 8: Trend line of Aldi....................................................................................................19
Illustration 9: Gantt chart...............................................................................................................21
Illustration 10: Network diagram...................................................................................................22

INTRODUCTION
Morrison is one of the largest supermarket chains in the UK. This report is prepared on
the statistical tools. In today era, all decisions are taken on the basis of collected data. Due to this
reason it is necessary to have deep knowledge of the collected data. In this regard, in the report,
statistical tools like mean, median and mode etc are applied on the company data. Apart from
this trend analysis is also done and charts are interpreted in the report. Along with this, in the
report, network diagram is prepared and its results are interpreted in proper manner. At the end
of the report, project evaluation techniques are also applied on the given cash flows and best
project is selected for the firm.
1.1 Collection of primary and secondary data
Primary data refers to the data that is collected for the first time by the researcher.
Primary data can be collected by distributing questionnaire, schedules etc. Apart from this, data
can also be collected through telephone calls if respondent are rich people and it is not possible
to approach them. On other hand, secondary data refers to the data that is already collected by
someone. Secondary data can be collected from the books, journals and magazines etc.
Collection of both data is necessary for the research (Krikidis, Devroye and Thompson, 2010).
This is because by conducting secondary research a researcher comes to know about the past
scenario. On the basis of knowledge of past scenario and current business conditions researcher
is in position to draft questionnaire in proper manner. Hence, here secondary research help
researcher in conducting a research (Edge and Compton, 2010). In order to conduct a research
sample of 50 people is taken that resides in to different borough of London. These people belong
to different income level and their social status is also different. Hence, good quality of data will
be collected from the respondents.
1.2 Survey methodology and sampling frame for the research
There are many sampling techniques and some of them are as follows.
 Simple random sampling- It is a sampling technique in which all sample units are taken
randomly from the population. Means that on the basis of specific criteria sampling units
are not taken for the research (Piwowarski, Krajewski and Lelito, 2010). This sampling
technique is used in the research when specific category of respondents is not required for
research.

 Stratified random sampling- This is different type of sampling and under this entire
population is divided in to several parts and from these parts sample units are taken for
the research. The main benefit of this sampling technique is that in this method data from
specific type of people can be taken by the researcher. Due to this specific feature this
sampling frame is very popular among the researchers.
 Cluster sampling- In this sampling technique population of the geographic area is
divided in to several parts and from same sampling units is taken by the researcher
(Basak, 2012). Data from specific type of people can be collected in the specific
geographic area by making use of this sampling method. Hence, it is third sampling
technique that is famous among the researchers.
1.3 Designing questionnaire for survey
Demographic Details
 Name:
 Age:
 Gender:
 Occupation:
 Marital status
Do you frequently make purchase of food products from WM Morrison?
Yes ( )
No ( )
What are the factors to which you give priority before making purchase from Morrison?
Attractive discounts ( )
Better quality ( )
Near to your place ( )
Value for money ( )
How frequent you visit the retail store of Morrison for the purchase?
Daily ( )
Weekly ( )
Monthly ( )
According to requirements ( )

At the time of offers ( )
From the below given options, in which category services at WM Morrison fall?
Poor ( )
Bad ( )
Average ( )
Good ( )
Excellent ( )
Are you satisfied with the goods and services of the company?
 Strongly satisfied
 Satisfied
 Neutral
 Dissatisfied
 Strongly dissatisfied
How much money you spend at WM Morrison in a single purchase?
 <£200
 £200-400
 £400-600
 > £600
In terms of service, which retail supermarket you mostly prefer?
WM Morrison ( )
JS Sainsbury's ( )
LIDL Ltd ( )
ALDI ( )
Do you wish to give any suggestion for the improvements in the products and services of WM
Morrison?
TASK 2
2.1 Statistical tools for the decision making
Statistical tools that are used for decision making are as follows:

 Mean- It is an average value that is related to the specific variable. If, current value of the
variable like sales is above mean value then it is considered as the best performance. If,
sales are falling continuously but even though it is above average sales then, it acts as a
danger signal for the firm (Gravetter and Wallnau, 2013). On the other hand, actual sale
falls below average sale then it is assumed that firm is giving very poor performance and
immediate actions are taken by the management in order to improve their performance.
This technique is also used by the stock market analysts in order to determine support and
resistance level for the stock price.

 Median- It refers to the medium value that is dividing data in to two parts. On the basis
of analysis of both the set data, firm can identify the trends and changes in same. This
technique is commonly used with mean which is a statistical tool (Fowler, Cohen and
Jarvis, 2013). It is possible that with passage of time, trends also get changed. Hence, it is
median that helps in analyzing trends related to the specific variable in a proper manner.
 Mode- Mode refers to the value that often gets repeated. This helps in identifying trends
related to the specific variable. This tool is often used by the stock market experts in
order to identify a particular price level that is repeated again and again (Agresti and
Kateri, 2011). On that basis, experts make a prediction. Hence, due to specific feature,
this tool is widely used by the finance experts.
2.2 Analysis of results
Table 1: Calculation of mean, median and mode for Morrison and its competitors
Year
Wm
Morrison’s
Js
Sainsbury’s Lidl Ltd Aldi
2009 14528 18911 164.5 2004
2010 15410 19964 167.9 2014
2011 16479 21102 183.2 2768
2012 17663 22294 202.7 3891
2013 18116 23303 212.2 5200
Mean 16439.2 21114.8 186.1 3175.4
Median 16479 21102 183.2 2768
Mode #VALUE! #VALUE! #VALUE! #VALUE!
Mean- Mean indicates the average value of the specific variable. In case of Morrison, it can be
seen that actual sale is above the average sale. In case of competitors, same scene is also
observed. If, we talk about the growth rate of revenue of these firms, then it can be seen that
Morrison is at third position. On the basis of gap between 2013 sales and average sales, growth
of the sales is identified. In case of Aldi and Sainsbury, this gap is much high and due to this
reason, Morrison' is kept at this position. After that, Lidl comes in this ranking. Hence, it can be
said that firm needs to do lot of hard work in order to remain in competition.

Median- Median divides entire data into two parts and helps in trend analysis of these different
parts.
Table 2: Percentage change in sales
Year
Wm
Morrison
’s
Js
Sainsbur
y’s Lidl Ltd Aldi
2009 14528 18911 164.5 2004
2010 15410 6.07% 19964 5.57% 167.9 2.07% 2014 0.50%
2011 16479 6.94% 21102 5.70% 183.2 9.11% 2768 37.44%
2012 17663 7.18% 22294 5.65% 202.7 10.64% 3891 40.57%
2013 18116 2.56% 23303 4.53% 212.2 4.69% 5200 33.64%
By analysis two set of data with using mean value, it has been identified that in initial time
period, growth rate of Tesco sales was higher than its competitors. But in FY 2013, its sales fall
suddenly and due to this reason, it legged behind in competition. After median value downtrend
is observed in all companies sales but this decline happens at the higher rate in case of Morrison.
In mean, it is mentioned that Morrison is at third position in terms of sales growth rate. But,
median gives a clear picture of entire scenario and indicates that Morrison is at third position
because its sales growth rate fall from 7.18% to 2.56%. Hence, it can be said that median is an
effective tool of data analysis.
Mode- Value of mode is zero and it means that none of the sales value is repeated in case of all
these companies.
2.3 Analysis of data using measure of dispersion
Table 3: Calculation of standard deviation
Year
Wm
Morrisons
Js
Sainsbury’s Lidl Ltd Aldi
2009 14528 18911 164.5 2004
2010 15410 19964 167.9 2014
2011 16479 21102 183.2 2768

2012 17663 22294 202.7 3891
2013 18116 23303 212.2 5200
Standard deviation 1502 1758 21 1369
Interpretation
Standard deviation reflects the deviation in the value of the specific variable from the
mean value. Here, standard deviation is for sales and it is positive which is indicating that all
these firm’s sales is above the mean value. Here, standard deviation of Aldi and Sainsbury is also
higher than Morrison’s. This again indicates that in terms of growth rate, Morrison is on the third
position then Aldi and Morrison's.
2.4 Quartile, percentile and correlation cofficent uses in data analysis
Table 4: Calculation of quartile and percentile
Wm
Morrisons
Js
Sainsbury’s Lidl Ltd Aldi
Quartile 1 15410 19964 167.9 2014
Quartile 2 16479 21102 183.2 2768
Quartile 3 17663 22294 202.7 3891
Interpretation
Quartile indicates the three data sets that divide entire data set in to three parts. In case of
all these companies, Quartile values are increasing and this reflects that firm’s sales are
increasing continuously. There is not a difference in between quartile and percentile but, only
way of calculation is different. Values of both calculations remain same and divide data set into
three parts. Hence, it can be said that both things indicate the same thing.
Table 5: Calculation of correlation
Year
Wm
Morrisons Profit
2009 14528 1452.8
2010 15410 1541
2011 16479 1647.9
2012 17663 1766.3

2013 18116 1811.6
Correlation 1
Interpretation
Correlation indicates the relationship between two variables. When one variable get
changed other variable also change. Correlation between these values always remains between -
1, 0 and 1. Zero means that there is no relationship between two variables. On other hand, if
value of correlation is one then it means that both variables move in a same direction and there is
a very strong correlation between both of them. If correlation value is negative then it means that
there is negative correlation between both variable values and this also indicates that values of
both variables are moving in different direction. Here, value of correlation is one and this reflects
that firm sales and profit are strongly related to each other.
TASK 3
3.1 Graphs on information derived from business scenario
Wm Morrison's
1 2 3 4 5
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
14528 15410
16479
17663 18116
Column C
Column D
Illustration 1: Wm Morrison's sales revenue

Interpretation- It can be seen from the chart that revenue of Morrison is elevating during 2009 to
2013. This reflects that management of Morrison took sound business decisions in last couple of
years. In adverse economic scenario it earns a good profit. In past years performance on
economic parameters was very poor. Even in such a situation firm sales does not decline and this
is its big achievement.
JS Sainsbury's
Interpretation- Current market share of Sainsbury in the UK retail industry is 16.6%. From the
table given below it can be observed that sales revenue of JS Sainsbury's is continuously
increases from 18,911 to 23,303. Plunge in sales revenue is very impressive and it also reflects
that firm is taking various steps that lead to increase in its revenue. Mentioned firm face lots of
business problems due to adverse economic condition in its business. Even though it successfully
increase its revenue from 18,911 to 23,303. From the table given below it can be observed that
there is stability in the growth rate of sales in case of Sainsbury then Wm Morrison. Up to FY
2012 its sales revenue enhanced at the rate of 5% every year. But in FY 2014 this growth rate fall
to 4%. But this fall was not so big and it can be said that in opposite business conditions firm
book a profit.
1 2 3 4 5
0
5000
10000
15000
20000
25000
Column E
Illustration 2: Sales revenue of JS Sainsbury's

Table 6: Percentage change in JS Sainsbury's sales revenue for FY 2009-13
Year JS Sainsbury’s Percentage change (Y on Y basis)
2009 18911
2010 19964 5.5681878272
2011 21102 5.7002604688
2012 22294 5.6487536726
2013 23303 4.5258814031
Lidl
Interpretation- It can be seen from the chart that that Lidl sales revenue increased continuously
for the given year of data. During the mentioned time period its sales revenue increased from 164
to 212. If we compare company sales then it can be seen that firm revenue is very low relative to
competitor firms but its sales growth rate is very high. In the table it can be observed that growth
1 2 3 4 5
0
50
100
150
200
250
Column F
Illustration 3: Sales revenue of Lidl from FY 2009- 2013

rate of sales revenue was just 2%. But this rate gets increased in the FY 2011 and sales grow at
9.11% in this financial year.
Table 7: Percentage change in Lidl sales revenue
Year Lidl Ltd Percentage change (Y on Y basis)
2009 164.5
2010 167.9 2.06
2011 183.2 9.11
2012 202.7 10.64
2013 212.2 4.64
After that in FY 2012 sales elevated by 10.64%. So, it can be said that there was consistency in
the firm performance. This percentage increase is very big and a gap of 7% and 8% is observed
if values are compared on year on year basis. But in next financial year this growth rate of
decline to 4.64%. Hence, it can be said that firm give a good performance but there was lot of
fluctuation in sales.
ALDI

Interpretation- In the graph it can be seen that sales revenue of Aldi is increasing very quickly
from FY 2009-13. During the FY 2009-2013 Aldi revenue increased from 2004 to 5,200 and it
can be said that sharp traction is observed in sales revenue. This happen when global economic
crisis was spreading in the domestic and international market. Hence, it can be said that firm give
a good performance.
Table 8: Sales revenue of Aldi
Year Aldi Percentage change (Y on Y basis)
2009 2004
2010 2014 0.49
2011 2768 37.4
2012 3891 40.57
2013 5200 33.64
From the given table it is observed that sales revenue in FY 2010 sales revenue only increases by
0.49% only. But after that in FY 2011 this rate increased to 37 and 40% respectively. In next
financial year also this rate was 33.64%. Hence, it can be said that due to recession in an
economy firm sales decline in last financial year.
1 2 3 4 5
0
1000
2000
3000
4000
5000
6000
Aldi
Illustration 4: Sales revenue of Aldi

3.2 Trend lines
Wm Morrison's
Interpretation- From the chart it can be seen that firm sales will increase continuously in
upcoming years. But currently entire world is entangled in the global economic crisis and
homeland of the Morrison's is also affected to large extent by the recession. Any negative change
in the economy can affect the profit of the firm. Hence, firm need to remain cautious and it must
formulate a suitable strategy in order to counter threats and capitalize opportunities.
JS Sainsbury's
1 2 3 4 5
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
Wm Morrisons
Linear (Wm Morrisons)
Illustration 5: Trend line on Wm Morrison

Interpretation- From the chart of Js Sainsbury it is clear that its sales revenue will increase in
upcoming years. But turmoil in economy may prove this prediction wrong. Along with this,
current Euro zone crisis may also create problems for an organization.
Lidl
1 2 3 4 5
0
5000
10000
15000
20000
25000
Js Sainsbury’s
Linear (Js Sainsbury’s)
Illustration 6: Trend line of JS Sainsbury's

Interpretation- Trend line chart is showing that in upcoming year’s sales of the firm will
increase. For two years increase in sales of Lidl was observed. In FY 2014 its growth rate
confined to just 4%. On the basis of performance in past years it is forecast that in upcoming
years sales will increase. For this firm need to formulate a unique business strategy.
Aldi
Interpretation- In the diagram it is seen that trend line of Aldi is rising upward. This indicates
that in upcoming year’s sales of the firm will increase strongly. In past firm sales increase from
30-40%. On that basis it is predicted that sales will increase at fast pace in upcoming years.
1 2 3 4 5
0
50
100
150
200
250
LidlLtd
Linear (LidlLtd)
Illustration 7: Lidl trend line
1 2 3 4 5
0
1000
2000
3000
4000
5000
6000
Aldi
Linear (Aldi)
Illustration 8: Trend line of Aldi

However, firm can not entirely believe on the trend line chart and it will need to take strong
action in order maintain its current performance.
3.3 Covered in PPT
3.4 Formal business report
To
The Board of Directors of Morrison's
Date: 27th January 2016
Introduction
In this report various statistical tools like Mean, median, mode and standard deviation are
applied on the given data. Results of these statistical tools are also interpreted in this report.
Method
 A primary data is collected in order to understand consumer behavior of the people.
 Secondary data is also collected for understanding past scenario.
Findings
In FY 2013 firms sale decline and there were two reason behind same one was recession in
economy and low price by the competitors. Due to recession people spending capacity get
reduced and due to low price by the competitors company is compelled to sale its product at
low price. Due to this reason firms are earning low margin on sales. Hence, firms need to focus
on generating economies of scale in the business.
Recommendation
In order to increase profit Morrison’s needs to prepare attractive offers. This will help firm in
increasing its customer base. On other hand, firm need to generate ways through which it can
generate economies of scale. By doing so firm can enhance its revenue earning capacity.
TASK 4
4.1 Information processing tools
Following are the information processing tools that firms normally used.
 Management information system- This is an information system that is used by the
middle level managers for making day to day business decisions (Vijayaraghavan and
Dornfeld, 2010). Under this information system lots of information is stored and

processed in proper manner. This information system process information in a systematic
way and generate valuable information on the basis of which smart decisions can be
made in easy manner.
 Decision support system- This is an information system that is used at the top level of
management. This support system has a special facility of simulation by using which
decisions in difficult situation can be made in easy way (Underhill. and Goodridge,
2012). Due to this reason the mentioned information system is widely used by the
business firms.
 Transaction processing system- In this information system data related to all transactions
is entered in proper manner. Entered data is processed and systematic information is
generated in proper manner. This information system is used by the lower level of
managers in order to remain up to date day to day business transactions.
4.2 Network diagram
Illustration
9: Gantt chart

Critical path method is a diagram that indicates the time period within which each and
every sub activity of the project must be completed (PERT chart (Program evaluation and review
technique) definition. 2015). Project manager needs to perform these activities in the specific
sequence. Path for this project is 1+5+8+9+10 and total time taken required to complete a project
is 22 days. Hence, it can be said that this is a maximum time in which project can be completed.
4.3 Project evaluation techniques
ARR (Average rate of return) method
Table 9: ARR of projects
Project A Project B
Initial investment 500000 500000
1 100000 50000
2 200000 150000
3 400000 300000
Illustration 10: Network diagram

4 300000 400000
5 200000 300000
Total return 1200000 1200000
Average return 240000.00 240000.00
ARR 48.00% 48.00%
Interpretation
ARR indicate the average return that a project earns on the invested amount (Accounting
rate of return method. 2015). ARR of the both projects is 48% and due to this reason none of the
project out of available alternatives can be considered viable for the firm.
NPV (Net present value) method
Table 10: NPV of Project A&B
Project A Project B
Initial investment 500000
PV @
10% Present value 500000
PV @
10%
Present
value
1 100000 0.909 90900 50000 0.909 45450
2 200000 0.812 162400 150000 0.812 121800
3 400000 0.731 292400 300000 0.731 219300
4 300000 0.659 197700 400000 0.659 263600
5 200000 0.593 118600 300000 0.593 177900
Total cash inflow 862000 828050
500000 500000
NPV 362000 328050
Interpretation
NPV indicate the net present value of the project that remain after deducting initial
investment value from the present value of the cash flows (Evaluating project using NPV (Net
present value). 2010). NPV of project A is greater than project B and due to this reason former
project is considered better for the firm then latter project.

Payback period method
Project A Project B
Initial investment -500000 -500000
1 100000 -400000 50000 -450000
2 200000 -200000 150000 -300000
3 400000 200000 300000 0
4 300000 500000 400000 400000
5 200000 700000 300000 700000
Payback period 300000 350000
1.5 2.3
Interpretation
It indicates the time period within which project can recover the invested amount. Project
A can cover invested value in one year five month and project B cover same value in two year
three months. Hence, project A is considered viable for the Morrison.
IRR (Internal rate of return) method
Table 11: IRR of projects
Project A Project B
Initial investment -500000 -500000
1 100000 50000
2 200000 150000
3 400000 300000
4 300000 400000
5 200000 300000
IRR 33.21% 20.98%
Interpretation

IRR indicate the actual return that a project can earn on the invested amount. IRR of
project A is 33.21% and some of the project B is 20.98%. Hence, project A is giving better return
and due to this reason this project is considered viable for the Morrison.
CONCLUSION
On the basis of entire discussion it is concluded that firms must use statistical tools for
data analysis. By making use of these tools firm can analyze its performance from various
angels. Apart from this project managers must also apply the network diagram techniques in
order to identify the time within which project must get completed. If project will not
implemented on time then cost of project will increase. Hence, this technique is very useful for
the managers. Selection of the project randomly may prove costly to the firm. Hence, project
managers must apply project evaluation techniques in order to select best project for the firm.