Analysis of Decision Making Tools and Techniques for Business

This report delves into the application of various tools and techniques for effective business decision-making, focusing on statistical, financial, and management accounting approaches. It analyzes data collection strategies, including primary and secondary data sources, and outlines research methodologies. The report explores sampling frameworks and the use of questionnaires for data gathering. It presents data analysis techniques, such as calculating mean, median, and mode, alongside graphical representations like multiple bar charts and line graphs to illustrate trends in sales and delivery costs. Furthermore, the report examines key decision-making terminologies, including transaction processing systems, management information systems, decision support systems, and executive information systems. It also covers critical path analysis, Gant charts, network diagrams, and financial tools like Net Present Value (NPV) and Internal Rate of Return (IRR), providing detailed calculations and interpretations. The report aims to equip business managers with practical insights for making informed decisions in a competitive environment.

Decision Making for Business
Use of Decision Making Tools and Techniques

Contents
Introduction:................................................................................................................................................5
1.1 Data Collection Planning:.................................................................................................................5
Primary Data........................................................................................................................................5
Type of Primary Survey:.......................................................................................................................5
Secondary Data:...................................................................................................................................6
Data Collection Srategy:......................................................................................................................6
1.2 Research Methodology........................................................................................................................6
Purposes of the Study:.......................................................................................................................6
Data Analysis:......................................................................................................................................6
1.3 Sampling Framework:....................................................................................................................7
1.3.1 Characteristics of Sampling Framework......................................................................................7
1.3.2 Basis of Sampling Framework:....................................................................................................7
1.34 Research Questionnaire.......................................................................................................................7
2.1 Use of Representative Figure(s) to Analyze Data.................................................................................10
Ascending Order Arrangement of Marks obtained:...........................................................................10
Data Table:........................................................................................................................................11
Mode:................................................................................................................................................11
Comment on the Findings:................................................................................................................12
2.3: Value within Three standards Deviation........................................................................................12
3.1 Multiple Bar Chart to Present the Data...............................................................................................13
3.1.1 Data Presentation Table................................................................................................................13
3.1.2 Multiple Bar Charts:......................................................................................................................13
3.2 Historical Trend of Sales and Delivery Cost:.......................................................................................14
3.2.1 Table of Historical Data of Budgeted Sales and Delivery Cost.....................................................14
3.2.2 Line Graph to show the Trend of Fluctuation and Change...........................................................14
3.3 Trend of Historical Actual Sales, Delivery Cost and Budgeted Sales Trend......................................15
3.3.1 Table of historical Records of Actual Sales, Delivery Cost and Budgeted sales Trend................15
3.3.2 Line Graph of Historical Trend:.....................................................................................................15
3.3.3 Why this Variation:.......................................................................................................................16
4.1 Terminologies Relevant to Decision Making:.....................................................................................16
4.1.1 Transaction Processing Systems:......................................................................................................16

4.1.2 Management Information Systems:..............................................................................................16
4.1.3. Decision Supporting Systems:.....................................................................................................16
4.1.4 Executive Information Systems:...................................................................................................17
4.2. Critical Path Analysis and Gant Chart and Network Diagram:...........................................................17
4.2.1. Critical Path Analysis and Gant Chart:..........................................................................................17
Critical Path......................................................................................................................................17
Gant Chart:........................................................................................................................................17
4.2.2 Network Diagram and Critical Path..............................................................................................18
Net Work Flow Diagram....................................................................................................................18
ii) Determination of critical Path Table..............................................................................................18
Five Potential Paths...........................................................................................................................18
4.3 Calculation of Net Present Value and IRR..........................................................................................19
4.3.1 Calculation of Net Present Value(NPV).......................................................................................19
4.3.2 Calculation of (Internal Rate of Return IRR:................................................................................20
Conclusion:...............................................................................................................................................22

Introduction:
This report shall attempt to discuses about different tools and techniques of business decision making.
Statistical, Finance, Accounting, Management accounting approaches along with mathematical tools shall
be applied here to discuss the hypothetical situation of business decision making. . Today’s business
environment is much more volatile, unstructured and unpredictable complexed by huge competition and
capitalism. Management has to make different decision day today or occasionally. Therefore they have to
use tools and techniques useful and helpful for them. For making decision that are more realistic,
sophisticated and time befitting, we shall apply some very prominently and widely used tools of decision
making specially statistics and finance. B&W PLC shall find these techniques relevant for tits decision
making purposes. These techniques like Critical path analysis, Net Present Value, Internal Rate of Return
(IRR) etc are financial and management science tools that are vey widely used to make investment and
operating decision making. As a new manager, he will find each and every technique very useful for his
job. Though all of the techniques have their own merits and demerits, in combination and if used in
aggregation they may become very highly valuable for decision making purpose.
Task 1 –
1.1 Data Collection Planning:
Primary Data
The core objective of this study is to collect data from filed level market and surrounding environment
about B&W PLC to analyze its current and future prospect. This survey focuses on collecting precise,
accurate and empirical data that will also ensure the criteria of validity and reliability. Without primary
research it is not possible to find out both valid and reliable data can only be collected through field level
primary research.
Primary data means such kind of data that is collected from genuine source and also has not been
previously used for any purpose. It requires the direct correspondence of the researcher and the source of
data thorough observation or direct communication. B&W PLC shall collect data from customers and
suppliers as much as possible as these are most useful and genuine source of primary data.
Type of Primary Survey:
Some of the most commonly used primary data collection methods are:
a) Survey,
b) Checklists,
c) Interviews-face to face, telephone etc.
d) Observation.
e) Pictorial data.
f) Direct and active participation.

Secondary Data:
A secondary data means data that has been used by someone or party for any purpose and has been used
for research purpose also. This type of data is not collected from the main sources of generation. This
type of data is very easy to use as they are very well classified and processed But there remains
substantial risk of being biased by the previous user. So, the new manager should be very careful before
collecting and using secondary data. Some very important sources of secondary data are as follows:
1. Newspapers,
2. Magazines,
3. Reports of bureau of statistics,
4. Televisions,
5. Radio
6. Website
7. Published research papers etc.
Data Collection Srategy:
For the purpose of the study the survey team shall explore the field level for collecting primary data from
relevant sources like customers or suppliers. They should also explore the related and available secondary
sources of data.
1.2 Research Methodology
Purposes of the Study:
a) Primary Purpose:
Primary objective of this research is to obtain data for the analysis of the current market and
potential market..
b) Secondary Purpose:
Secondary objectives are ensuring customer satisfaction, development of new market, increasing
efficiency, get insi9ght about the competitors promoting the brand, identification of problems in
the market, improvement of products and service, improvement of quality of marketing people.
Data Analysis:
Proper analysis of data is required for getting right and reasonable findings. It is more important than
mare collection of data from very good sources. Whether a research will be useful or not depends on how
well and efficiently the analysis is carried out.

1.3 Sampling Framework:
Sampling framework is nothing but a guideline for sampling for study purpose. It defines the scopes, and
areas of sampling. It is very crucial as it guides sampling to be efficient, effective, timely, and cost saving.
Some very necessary characteristics for sampling framework are given below:
1.3.1 Characteristics of Sampling Framework
* Comprehensive.
* Specification of Sample size.
* Sample plan
* Updated
* Not rigid or changeable.
* Clear and not vague
* Understandable.
* Structured and formal.
* Validity and rationality
* Numbering
1.3.2 Basis of Sampling Framework:
* GDP, GNP etc. economic conditions.
* Inflation
* Demand and Supply
* Consumer Price Index.
* Movement and elasticity of market.
* Income and Development of people
* Analysis of market, demand, and supply condition
* Existing market research.
1.34 Research Questionnaire
This survey will gather the necessary information through questionnaire. We developed a formal
questionnaire for this purpose. Here is the questionnaire to be used in the field level data collection.

A Questionnaire on Market Survey
B&W LC
Please provide your response to the Following
Gender : a) Male b) Female Age:……… Profession: …………. Monthly Income: ………….
1. Do you purchase our product?
a) Very frequently
b) Frequently
c) Occasionally
d) Sometimes.
e) Others
1. Why do you like our product?
a) It is cheap.
b) It is quality product.
c) It is available.
d) Highly aware of the product.
e) Others.
3. Do you purchase the same product of another company?
a) Very frequently
b) Frequently
c) Occasionally
d) Sometimes.
e) Others
4. Why do you like the product of other brand?
a) It is cheap.
b) It is quality product.
c) It is available.
d) Highly aware of the product.
e) Others.
5. What is the level of your satisfaction with our product?
a) Very strongly satisfied
b) Strongly Satisfied
C) Moderately Satisfied.
d) Strongly dissatisfied.
e) Dissatisfied.
5. How much satisfied are you with our services?
a) Very strongly satisfied
b) Strongly Satisfied
C) Moderately Satisfied.
d) Strongly dissatisfied.
e) Dissatisfied.

6. How much satisfied are you with our promotional actives?
a) Very strongly satisfied
b) Strongly Satisfied
C) Moderately Satisfied.
d) Strongly dissatisfied
e) Dissatisfied.
7. What is our opinion about the price of our product?
a) Very strongly satisfied
b) Strongly Satisfied
C) Moderately Satisfied.
d) Strongly dissatisfied.
e) Dissatisfied.
8. What is your opinion about the features and quality of our product?
a) Very strongly satisfied
b) Strongly Satisfied
C) Moderately Satisfied.
d) Strongly dissatisfied
e) Dissatisfied.
9. How well are you satisfied with the post sales services of our product?
a) Very strongly satisfied
b) Strongly Satisfied
C) Moderately Satisfied.
d) Strongly dissatisfied
e) Dissatisfied.
11. How much loyal are you to our brand?
a) Very highly loyalty.
b) High loyal.
c) Moderate loyal.
d) Not loyal.
13. How much are you satisfied about the availability of our product?
a) Very strongly satisfied
b) Strongly Satisfied
C) Moderately Satisfied.
d) Strongly dissatisfied
e) Dissatisfied.

14. How much satisfied are you with our sales people?
a) Very strongly satisfied
b) Strongly Satisfied
C) Moderately Satisfied.
d) Strongly dissatisfied
e) Dissatisfied.
15. Our product is the best in market. Do you agree?
a) Very strongly agree.
b) Strongly agree
c) Strongly disagree
d) Very strongly disagree
e) Indifferent,.
15. What score will you give to or product out of 100?
Please specify our answer with numerical value
Task 2:
2.1 Use of Representative Figure(s) to Analyze Data
Ascending Order Arrangement of Marks obtained:
8,11,12,16,18,19,20,21,21,21,22,25,26,27,28,30,31,32,32,33,34,38,39,43,45

Data Table:
8 27
11 28
12 30
16 31 Median,(Me)
18 32 Median=(n+1)/2 th term
19 32 Median=( 25+1)/2
20 33 = 13th Vale = 26
21 34
21 38
21 39
22 43
25 45
26
Summation
= 652
Average= 25.32
Standard
Devi.
9.74645
2
Implicating of Findings:
The average number calculated above shows that the every participant obtained on an average a
number above the minimum marks for passing that is 20. But, the overall performance is very much
below than the marginal mark.
Mode:
Mode is the number that has occurred the highest number of time in the observation. We find that the
observation 21 has occurred 3 times in the observation.
So, Mode, Mo= 21

Comment on the Findings:
All of the representative statistics calculated above (Mean, Median, Mode) shows that the overall
performance of the employees who have participated in the training program is satisfactory. As per the
representative figures, all the employees have obtained pausing marks. But in actual case some of the
employees have obtained lower than the floor marks for passing. Thus, there is still huge scope for the
improvement of the result.
2.3: Value within Three standards Deviation
The formula for determining the values within 3 standard deviations is:
= X ± 3 S.D
= X ± 3*1
= 5 ± 3*1
So, Upper value is = 5+3
= 8
Lower Value is = 5-3
=2
As per empirical Rule, almost all the observations per cent of the values should be in an interval of 2-8 or
3 standard deviation. He also suggests that, about 68 percent information shall lie within an interval of 1
standard deviation and about 95 per cent information should lie in an interval of 2 standard deviation.

TASK 3
3.1 Multiple Bar Chart to Present the Data
3.1.1 Data Presentation Table
Year 2011 2012 2013 2014 2015
Products
Computers 50 120 150 100 220
Play
Stations 80 150 100 140 160
Tabs 150 100 150 90 130
Total 280 370 400 330 510
3.1.2 Multiple Bar Charts:
Products Computers Play
Stations Tabs Total
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Chart Title
2015
2014
2013
2012
2011
The bar chart as given above shows that in 2015, the sales of computer has increased very highly. Play
station sales has increased in 24 and 2015 compared to the sales of Tabs. Though in 2011 Tabs is the
highest selling product, but in 2015 computers sold the highest number of units. It implies that, the market
and demand of computer is increasing and it should get more attention from the management.

3.2 Historical Trend of Sales and Delivery Cost:
3.2.1 Table of Historical Data of Budgeted Sales and Delivery Cost
Month Budgeted Sales Delivery Cost
July 50,000 340
August 150000 400
September 550,000 700
October 560,000 650
November 650,000 760
December 710,000 750
January 760,000 800
February 470,000 500
March 350,000 480
April 250,000 370
May 80,000 350
June 200,000 420
3.2.2 Line Graph to show the Trend of Fluctuation and Change
July
August
September
October
November
December
January
February
March
April
May
June
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
Chart Title
Budgeted Sales Delivery Cost

3.3 Trend of Historical Actual Sales, Delivery Cost and Budgeted Sales
Trend
3.3.1 Table of historical Records of Actual Sales, Delivery Cost and Budgeted sales
Trend
Month
(Fiscal) Budgeted Sales Delivery Cost Actual Sales
July 50,000 340 70,000
August 150000 400 120,000
Septembe
r 550,000 700 600,000
October 560,000 650 560,000
November 650,000 760 600,000
December 710,000 750 720,000
January 760,000 800 740,000
February 470,000 500 800,000
March 350,000 480 450,000
April 250,000 370 550,000
May 80,000 350 240,000
June 200,000 420 280,000
3.3.2 Line Graph of Historical Trend:
1 2 3 4 5 6 7 8 9 10 11 12
0
100000
200000
300000
400000
500000
600000
700000
800000
900000
Line Graph
Month
Budgeted Sales
Delivery Cost
Actual SalesAxis Title

3.3.3 Why this Variation:
From the line graph in 3.3.2, it is found that from the month January to June the actual sales has become
higher than the budgeted sales. Before that, actual sales have remained below the budgeted sales unit. It
means sales people and sales department has been performing better than the before in filling up the
target. But most important observation form this graph is that the fluctuation in the level of sales is very
high and it has started declining very high during the last half of the fiscal year. It shows that demand is
falling. The causes of this may be several like, bad macroeconomic condition or the other factors not
under the control of management. Or the causes may be under the control of management like high
competition, high price of the product due to high cost, lack of innovations and changes, not using up to
date technologies, quality degradation, less attention on customer satisfaction etc.
TASK 4:
4.1 Terminologies Relevant to Decision Making:
4.1.1 Transaction Processing Systems:
Transactions processing systems divides the activities of organizations into separate individual parts for
ensuring a better management and effective and efficient performance of the activities. It is a computer
based program or software. It has several kinds like batch processing, real time processing, time sharing
and transaction processing. Important features of transaction processing systems are performance,
continuous availability, data integrity, ease of use, growth of module etc. It’s another name is transaction
server.
4.1.2 Management Information Systems:
Management information system is a process integrating information technology with traditional
management systems. It is very simply all about the study of people, work, operation, organization along
with technology and its uses in management. Its main objective is efficient and effective business
performance. Management information system requires the skill of problem solving along with
knowledge of business requirements for information systems.
4.1.3. Decision Supporting Systems:
Decision supporting systems or DCS is all about software based programs that help the organization to
make timely, useful, efficient and effective decision making. It aids business in gather all the required
data, keep them safe and process them, analyze the data and make decision appropriate for the situation
under condition. It assists management through avoiding laborious manual processor f decision making.

4.1.4 Executive Information Systems:
This is also known as executive supporting systems or ESS. This is specialized data based program that is
designed to aid the executives of the business. It is not only for the CEOS or CFOS of the business but
also for all senior employees. It helps the senior workers to proper and correctly store, manage, analyze
and use the data generated from the operation of the business.
4.2. Critical Path Analysis and Gant Chart and Network Diagram:
4.2.1. Critical Path Analysis and Gant Chart:
Critical Path :
In day to day activities, management may have several alternative ways to accomplish their job. But,
critical path means a way that requires the highest time to complete the work among the alternatives. It is
important for management to know the critical path to reduce the operating time in possible ways and
efficient performance of the task in a timely manner. It is all about preparation of a project schedule that
will be most efficient fro management.
Gant Chart:
Gantt chart is also a useful technique for developing project schedule. This model was proposed by Henry
Gantt in 1990. Gantt chart illustrates the project schedule by showing starting and ending time. It creates a
relationship among the activities under a project.

A 4
B 7
C 7
D 6
E 2
G 9
F 5
H 6
J 6
K 9
4.2.2 Network Diagram and Critical Path
Net Work Flow Diagram
ii) Determination of critical Path Table
Five Potential Paths
A : A-B-H-k= 4+7+6+9
B : A-C-E-H-K= 4+7+2+6+9
C : A-C-G-K= 4+7+9+9=29
D : A-C-F-J-K= 4+7+5+6+9
E : A-D-J-K= 4+6+6+9
Critical Path Determination
Paths Total
A 4 7 6 9 - 26
B 4 7 2 6 9 28
C 4 7 9 9 - 29
D 4 7 5 6 9 31
E 4 6 6 9 - 25
So, here the critical Path is A-C-F-J-K that requires total 31 days.

4.3 Calculation of Net Present Value and IRR
4.3.1 Calculation of Net Present Value(NPV)
Project A
Project A
Year Cash Flows Discounted P.V
2016 -20000 -20000
2017 7000 6481.481481
2018 8500 7287.379973
2019 9800 7779.555962
2020 9500 6982.783602
2021 15500 10549.03955
NPV 19080.24057
Project B
Project B
Year Cash Flows Discounted P.V
2016 -20000 -20000
2017 8500 7870.37037
2018 8900 7630.315501
2019 9600 7620.789514
2020 9700 7129.789572
2021 13500 9187.87316
NPV 19439.13812
From the NPV calculation done above, we can decide to select the project B.

4.3.2 Calculation of (Internal Rate of Return IRR:
Project A
Year
Cash
Flow PV @ 15 PV@20% PV@25% PV @30% PV@35% PV@37%
2016 -20000 -20,000 -20000 -20000 -20000 -20000 -20000
2017 7,000 6086.956522 5833.33333 5600 5384.615 5185.185 5109.489
2018 8,500 6427.221172 5902.77778 5440 5029.586 4663.923 4528.744
2019 9,800 6443.659078 5671.2963 5017.6 4460.628 3983.133 3811.223
2020 9,500 5431.655833 4581.40432 3891.2 3326.214 2860.148 2696.754
2021 15,500 7706.239397 6229.10237 5079.04 4174.601 3456.709 3211.655
NPV 12,096 8,218 5,028 2,376 149 -642
Total of the absolute NPV of the two closet Rates = 149+ 642
= 791
Ration between NPV of lowest Rate and Total of PV = 149/ 791
= 0.188
Internal Rate of Return (IRR) = Lowest rate + Ratio
= 35+ 0.188
= 35.188%

Project B:
Year Cash Flow PV@25% PV @30% PV@35% PV@37% PV@38%
2016 -20000 -20000 -20000 -20000 -20000 -20000
2017 8,500 6800 6538.46 6296.296 6204.38 6159.42
2018 8,900 5696 5266.27 4883.402 4741.86 4673.40
2019 9,600 4915.2 4369.59 3901.844 3733.44 3652.87
2020 9,700 3973.12 3396.24 2920.362 2753.53 2674.58
2021 13,500 4423.68 3635.94 3010.682 2797.25 2697.36
NPV 5,808 3,207 1,013 230 -142
Total of the absolute NPV of the two closet Rates = 230+142
= 372
Ration between NPV of lowest Rate and Total of PV = 230/ 372
= 0.62
Internal Rate of Return (IRR) = Lowest rate + Ratio
= 37+0.62
= 37.62%

Conclusion:
So far in this paper, it has been tried to discuss about different tools and techniques of business decision
making. Statistical, Finance, Accounting, Management accounting approaches along with mathematical
tools shall be applied here to discuss the hypothetical situation of business decision making. Nowadays,
business world is to volatile and complicated to predict anything. Therefore, management has to think
ahead of the time what may happen in future. They have to be all set to face the future challenges along
with tackling present competition and difficulties. Management has to make different decision that is not
simple, linear rather they are very complex and labors. Therefore they have to use tools and techniques
useful and helpful for them. For making decision that is more realistic, sophisticated and time befitting,
we shall apply some very prominently and widely used tools of decision making specially statistics and
finance. B&W PLC shall find these techniques relevant for tits decision making purposes. These
techniques like Critical path analysis, Net Present Value, Internal Rate of Return (IRR) etc are financial
and management science tools that are vey widely used to make investment and operating decision
making. As a new manager, he will find each and every technique very useful for his job. Though all of
the techniques have their own merits and demerits, in combination and if used in aggregation they may
become very highly valuable for decision making purpose.

References:
Carmona, R. (2012). Numerical methods in finance. Berlin: Springer.
Fitchett, J. and Davies, A. (2013).Consumer research methods. London: SAGE.
Heckard, R., Utts, J. and Utts, J. (2012).Statistics. Australia: Brooks/Cole, Cengage Learning.
Köhler, R. and Altmann, G. (2012).Quantitative syntax analysis. Berlin: De Gruyter Mouton.
Li, X. and Gao, S. (2012). Precipitation modeling and quantitative analysis. Dordrecht: Springer.
Mayes, T. and Shank, T. (2012).Financial analysis with Microsoft Excel. Australia: South-Western.
Render, B., Stair, R. and Hanna, M. (2012). Quantitative analysis for management. Upper Saddle
River, N.J.: Pearson Prentice Hall.
Robinson, T. (2012).International financial statement analysis. Hoboken, N.J.: John Wiley & Sons.
Dr. Prassana Chandra, Proijects, Planning, Analysis, Selection, Financing, Implementation and
Review.
Richard I. Levin, David S. Rubin, Statistics for Management, Seventh Edition(2010)