Business Decision Making

1
Table of Contents
Introduction....................................................................................................................3
Task 1.............................................................................................................................4
1.1 Plan for collecting primary and secondary data...................................................4
Plan for collecting the Data:.......................................................................................4
1.2 Present survey methodology and sampling frame...............................................7
1.3 Questionnaire.......................................................................................................9
Question1.....................................................................................................................10
Question 2....................................................................................................................10
Question 3....................................................................................................................11
Task2. Analyse the data effectively using the range of techniques.............................12
2.1 Present the data in comprehensive format:........................................................12
2.2 Calculation of averages to demonstrate the performance of the students:.........13
2.2.1 Calculation of Mean:...................................................................................13
2.2.2 Calculation of Median:................................................................................13
2.3 Calculation of the measures of dispersion:........................................................14
2.3.1 Calculation of Range:......................................................................................14
2.3.2 Calculation of Variance:.............................................................................14
2.3.3 Calculation of Standard Deviation:.............................................................15
2.4 Report on the analysis and interpretation of calculated average and measures of
dispersion.................................................................................................................15
2.4.1 Comparison of performance of students.....................................................15
Task 3:..........................................................................................................................19
3.1 Bar and Pie Chart Representation of number of bedrooms on the three streets
individually:.............................................................................................................19
3.2 Scatter Graph of Age and Weight of Children...................................................21
3.3 Power Point Presentation...................................................................................21
Task 4:..........................................................................................................................24
4.1 Investment appraisal methods and its pros and cons:........................................24
4.2 Preparation of Project Plan using Critical Path..................................................25
4.3 Calculation of Net Present Value and Internal Rate of Return..........................27
Conclusion...................................................................................................................28
References....................................................................................................................30

2
Introduction

For a business to flourish it is essential to understand the opportunities that may be

capitalised upon and the risks that need to be evaluated. Hence, for all the decisions to

be taken, an analysis of the feasibility of the investments returning profits needs to be

carried out. This process where in the company identifies with the strategic

methodology applied to decision making is called Business Decision Making. BDM

also takes into account the various internal and external factors that may be

responsible for lending an impact to the organization. (Bendat and Piersol, 2011)

Even though the selection of the methods to undertake the decisions is important, it is

the implementation and application of these strategies that makes the difference. This

report takes a careful analysis of the various methods that can be applied to Business

decision making that have been analysed in this report along with the formulation and

calculation of the various scenarios in this assignment. A concluding statement with a

few recommendations has also been added to the report.

3
Task 1

1.1 Plan for collecting primary and secondary data

For the case study that has been provided, a new facility or the institution that needs

to be made relies on the need and requirement of the general public that would be

availing the facilities once it has been made operational. This is why it is essential to

understand the requirements of the target group of people who would be using the

facility. While the new institution would be an apt opportunity for the school to

explore its reach and functions, it is also a plan to provide a quality range of services

to the target group. Assuming the factors that would lead to the success of the school

would do more harm than the good that is intended and a meticulous approach to

making the school as per the requirements of the target consumers is more

appreciated. Hence, playing over a set of defined goals and objectives is the better

approach in this case where in the services offered has to suit the individual needs of a

large group of people (Goetsch and Davis, 2014). Decisions to be made would have to

consider the various factors such as, the external and internal factors, the expectations

of the Parents from the school and the latest trends in the education industry. And for

a decision about the school to be taken there are some things that are imperative to a

balanced decision. Firstly, the collection of data which defines the needs and wants of

the target group along with the interpretation of this data such that accurate

information is sought. Once the new data is assimilated and interpreted, it becomes

very easy for the management to apply the right approach in the business decisions

thereby reducing the risk involved and increasing the chances of the greater success

for this venture.

4
Plan for collecting the Data:

While the need for collection and assimilation of data has been identified, it is also

important to make a note of the type of data that would benefit the business decision.

This involves taking into consideration the market trends and scenarios that are

external to the business decision that needs to be made. Majorly, two types of data

collection are to be planned. Primary Data that related to the first hand experiences

and suggestions of the target group of the people and the secondary data, which is

collected from the data analysed by other sources. Primary data would lay emphasis

on the interactions and experiences of the local people in the area where the school

needs to be made (Bazerman and Moore, 2012). This would also include a first-hand

collection of the needs and wants of the local people. Such a collection of data is also

important to understand the originality of the need of the school and is evaluated

against the intent of the management to start up a new venture.

Secondary data on the other hand would involve a lot of research and study and would

consider all the statistics and figures that have to be considered while assessing the

prime need for opening up the new school. Media, Publishing, Articles and research

papers are the common sources of secondary data that can be used to assess and

assimilate the information that is sought for effective and risk analysed decision

making. Primary data on the other hand is dependent upon first hand relations and

intercommunication channels that are being made (Pettigrew, 2014). This is why,

interviewing a set of people, surveying a particular area and sample questions that can

be applied to a target population can be considered. Group interactions to assess the

public opinion can also be considered. Thesis and research papers, articles that have

been published on the same subject and various other literary resources can be used as

5
effective sources of secondary data useful to the decision to be made (Berenson,

Levine, Szabat and Krehbiel, 2012).

It is important at this stage to understand the need behind two sources of data

collection. While the primary data helps in creating the opinion about the general

public, the secondary data helps in forming the conclusion based on mathematical and

statistical calculations. Both the analysis combined in equal proportions help in

making the right decision about the new school facility that needs to be opened up and

also lends to the business decision a nature of responsibility and accountability as far

as strategic Business decision making is concerned.

Certain information about the schools that can be found with the secondary data

analysis is

 The number of existing schools in the area

 The ratio of the population against the number of educational facilities

 The quality of the education being impacted by comparing the yearly results

declared

 The kind of Competition that may be countered by the school which is

planned

 The genuine need and requirement of the school that needs to be met

(Bernroider and Stix, 2015).

A detailed study of all these factors when conjoined with the peoples opinion about

opening the new school and their requirements creates a balanced business decision

that may be taken after the risk analysis has been carried out and the school points

towards the pre-defined goals that have to be met. While the primary data has been

assimilated within a radius of 10 Miles surrounding the present area, the survey has

6
been identified as the most effective method for collecting primary data. While a

primary data needs a good and comprehensive survey that needs to be carried out, a

target set of population which is considered to be the sample population for a larger

set of data is also defined.

1.2 Present survey methodology and sampling frame

A survey may be defined as a set of questions that need to be sought and the answers

of which need to be assimilated from the population that has been targeted. A set of

people called the sample population are made to attend to the survey being created

and made to participate keeping all the ethics in consideration. Considering this is a

survey that is pertaining to the school, the parents and those who have children in the

family are the best targeted people for this survey (Ferrell and Fraedrich, 2014).

While a basic survey would include the use of a questionnaire, there are other ways to

conduct effective surveys as well. Some of the basic methods are:

a) Interviews: In this method, a set of questions after ratification are finalised and

the target population is asked to answer the questions in their own words

keeping in mind their opinions and knowledge. While this method helps a

surveyor to collect effective first-hand data, it may be tedious when a large

group of sample population is being considered. Alternatively, scheduling an

interview may itself prove to be an obstacle of this method (Zsambok and

Klein, 2014).

b) Surveys through forms: This method involves distribution of the questionnaire

with the questions and space for answers provided on paper and the

participants are requested to undertake the survey. This method helps the

surveyor make quick surveys however a limitation with this method is that the

7
 surety and the originality of the answers cannot be ascertained (O'Leary,

2013).

c) Panel Surveys: Here a target group is subjected to a survey conducted by a

panel of people such that a person is interviewed or participates in a discussion

with a panel of surveyors. Apart from being time consuming and tedious, this

method has the advantage of allowing many surveyors to assess the answers

that are being provided and define the validity of the survey.

d) Online Surveys: This method is the most effective in times today where

internet connects the world better than the inter group and intra group

relationships. This is the primary reason why this method may be considered

to be the most effective. While this method has the biggest advantage of being

able to carry out global surveys and is not restricted to a geographical location,

the disadvantage is the delay that cab ne incurred while the participant is made

to participate in the survey. In this method the participant may or may not

understand the urgency of the survey (Nahum-Shani, Qian, et.al, 2012).

In a survey being conducted, the populations and the choice of the people who have

been chosen to complete the survey creates maximum impact when it comes to

identifying the truthfulness and the efficacy of the survey. For a questionnaire survey

or any other survey methodology to be answered correctly, it is essential to

understand the legitimacy and the suitability of the target population. This is

ascertained by sampling methods, where in the sample of the population for

conducting the survey is selected after an analysis. Below mentioned are the various

sampling methods that need to be applied.

Sampling method Advantage Disadvantage

Random Sampling : The The random sampling Cannot be applied to a

8
 method of randomly method allows for the large population

collecting a group of diversity in age, gender and The suitability of the target

people irrespective of cultural differences of people group has to be ascertained

the age, gender or creating a diverse yet unified before a random sample is

backgrounds to survey approved (Clark, 2013).

participate in the survey

Judgemental Sampling : This helps the surveyor is This method is completely

In this method the identifying and selecting just dependent upon the

personal discretion of the most suited people for discretion and judgement

the surveyors is the survey who may be able of the surveyor and hence

considered while to give the answers that are the surveyors experience

finalising the population just needed. and decision making

for the survey capacity needs to be fool

proof.
Snow Ball Sampling : This method relies on The certainty of the

Also called reference references that are being targeted sample group

sampling, in this method provided and so creates a identifying the right

that sample population is snow ball effect with 20 contacts for the references

asked to seek more people getting surveyed at is needed.

references from their the cost of 5

surroundings (Hashim &

Ahmad, 2015).

For the scenario that has been provided a sample population, can be formed with the

snow ball method or the Random sampling methods. And also, the questionnaire and

online surveys are best suited to the needs of the school.

9
1.3 Questionnaire

A questionnaire that has to be floated in the survey has been given as:

Question1.
Personal Information:

a. Gender Male or Female

b. Parent – YES / NO

c. Number of Children in the Family ----- 1 2 3 4 more than 4

d. Household Income ----------- 5000 – 10, 000

10,001 -15000

15001 – 20,000

20,001 – 25,000

25, 000 and above

Question 2

a. Are you aware of Excellent School Education Plc?

b. Are you satisfied with the number of schools in this Area?

c. Are you satisfied with your child’s current school and facilities that are

provided? YES / NO

d. What would you like to enhance in your child’s present school?

e. Rate your satisfaction with your child’s present school ( HS, S, N,D,HD)

S N D HD

HS
Highly Satisfied Neutral Dissatisfied Highly Dissatisfied

10
 Satisfied

Question 3
a. Tick an appropriate box against the aspects mentioned rating SA as the highest

and the SD box as the least.

Aspect SA A N D SD
Branding
Quality of

Education
Teaching Standards
Past results
Other activities
Fee Structure

SA A N D SD
Strongly Agree Natural   Disagre Strongly Disagree

Agree e

Task2. Analyse the data effectively using the range of techniques

2.1 Present the data in comprehensive format:
The below table shows the data of the scores of the students in a comprehensive

format divided in intervals

Score interval Frequency

20-29 3

11
 30-39 11

40-49 19

50-59 9

60-69 5

70-79 3

2.2 Calculation of averages to demonstrate the performance of the students:

The performance of the students can be shown through mean and median calculation:

Mean is calculated as the average of the scores that have been scored in the

examination. This also includes the total of the scores divided by the total number of

children who have appeared in the exam. On the other hand, median may be defined

as the middle value of the string of numbers that have been provided.

12
2.2.1 Calculation of Mean:
Using the below given formula, the mean is calculated to show the performance of the

students:

Mean = Total scores obtained

Total students appearing

= 20+21+29+…+70+72+75

50

= 2337

50

= 46.74

2.2.2 Calculation of Median:

(….matter)

Median = (N/2) th term + {(N/2)=1}th term)

= (50/2)th term + {(50/2)+1}th term)

= {25th term + 26 term)

= {45+45}

= 90

= 45

2.3 Calculation of the measures of dispersion:

13
Dispersion is defined as the measures of quartiles, variance, standard deviation and

percentiles of the figures that have been provided. Range is calculated as the Measure

of Dispersion in a string of values.

2.3.1 Calculation of Range:

In the case that has been provided, the highest value is at 75 and the lowest has been

placed at 20, this entitles the range of the values that is basically a variation of the

highest and the lowest values

Range = Highest value – lowest value

= 75 – 20

= 55

2.3.2 Calculation of Variance:

Variance is a measure of the range of numbers and how far they have been spanned

apart. In this case, the variation is calculated between the various scores that have

been Given

Variance = {Total of (x-mean)^2}

= (715.02+663.06+…+638.06+798.62)

50

= 8061.52

50

= 161.23

14
2.3.3 Calculation of Standard Deviation:
Standard deviation may be defined as the value that expresses the mean value of the

deviation that has been calculated.

Standard Deviation = √Variance

= √161.23

= 12.75

2.4 Report on the analysis and interpretation of calculated average and measures
of dispersion

The Average that has been calculated displays a satisfactory performance of the

Students in the exam. With almost 50 percent as the average score, this is a good

figure. . A standard deviation of 12.69 has been derived which again translates to the

average performance of the students overall.

2.4.1 Comparison of performance of students

Score sheet

Serial number assumed score in second subject

1 12
2 20
3 22
4 23
5 23
6 23
7 23
8 23
9 24
10 29
11 30
12 30
13 30
14 30
15 30
16 34
17 34
18 34
19 34
20 34
21 34

15
 22 34
23 34
24 34
25 42
26 42
27 43
28 43
29 43
30 43
31 43
32 43
33 44
34 45
35 45
36 45
37 45
38 45
39 45
40 45
41 55
42 56
43 65
44 65
45 65
46 65
47 65
48 76
49 78
50 79

Calculation of average and measures of dispersion

Formula Calculation Result

Mean Total of score in (12+20+22…+78+79)/50 40.96

second subject / Total = 2048/50

number of students
Median [(N/2)th term + [(50/2)th term + {(50/2)+1}th 42

{(N/2)+1}th term]/2 term]/2

= [25th term +26th term]/2

= (42+42)/2

16
 =84/2
Range Highest value – lowest 79-12 67

value
Variance total of [(X1- Total of [838.68+439.32+… 244.55

mean)^2]/N +1447.04]/50

= 12227.84/50
Standard √Variance √244.55 15.63

Deviation
From the above calculations, it can be inferred that the students have scored less than 50 per cent

in the second hypothetical subject also; however, the performance in first subject was better than

the second one. From the calculation of measures of dispersion, it can be analysed that the scores

are deviated from the mean value since the standard deviation is 15.63 whereas the variance is

244.55.

Task 3:
3.1 Bar and Pie Chart Representation of number of bedrooms on the three
streets individually:

Green Street
5
4
3
Axis Title 2 Green Street

0 5 10 15 20 25 30 35 40
Axis Title

17
 Green Street
10% 8%

1
2
17%
3
28%
4
5

37%

Church Lane

0 5 10 15 20 25

Church Lane

18
 Church Lane
5% 10%
15% 1
2
3
30% 4
5

40%

Eton Avenue

0 5 10 15 20 25 30 35

Eton Avenue

Eton Avenue
15% 5%
25%

1
15%
2
3
4
5

40%

19
3.2 Scatter Graph of Age and Weight of Children
Age Weight
1 9
2 11.5
3 14.5
3 15
4 16.5
4 17
5 18.5
6 19.5

Weight
25

20 19.5
18.5
17
16.5
15 15
14.5 Weight
11.5
10
9

0
0 1 2 3 4 5 6 7

3.3 Power Point Presentation

20
 Table of Contents
–
Introduction Slide 3

Calculation of the average weight Slide 4

Produce the Line of Best Fit Slide 5

Estimate the average weights of children Slide 6

aged 7, 8 and 9 months

Conclusion Slide 7

21
 Introduction
–
™ Average weight of the children of age 1 to 6 months is
measured to identify the standard weight of children in
that age group
™ Average weight is illustrated on the line of best fit
™ Line of best fit is used to find out the estimated average
weight of children of 7, 8 and 9 months

Calculation of Average
Weight of Children
–
Age Calculation of Average Age
w eight average
1 9 9
1
2 11.5 11.5
1
3 14.5+15 14.75
2
4 16.5+17 16.75
2
5 18.5 18.5
1
6 19.5 19.5
1

22
 Line of Best Fit
–
Line of Best Fit
25

y = 2.1571x + 7.45
20 R² = 0.97088
Axis Title

15
Average Weight
10
Linear (Average
Weight)
5

0
0 2 4 6 8
Axis Title

Estimate Average Weight of Children

–
Age Regression Value of X Calculation Average
Equation Weight
7 Y=2.157x 7 2.157(7)+7.45 22.549 pound
+7.45
8 Y=2.157x 8 2.157(8)+7.45 24.706
+7.45 pounds

9 Y=2.157x 9 2.157(9)+7.45 26.863

+7.45 pounds

23
Task 4:
4.1 Investment appraisal methods and its pros and cons:

Investment Appraisal methods help in checking the feasibility of the project in

question. This also lends clarity in understanding the returns that can be sought on an

investment that is being made.

Investment return rate IRR NPV:

 Used to check the Return Rate  Is a discounted cash flow

that can be achieved on an technique

investment and is based on the  Calculates the difference between

calculation of the NPV. the cash inflows and the capital

 Further details of the IRR can be outflows in a project for a time

used to calculated the Profit Loss span

Statement  Helps in calculating the

 Use of assumptions while Profitability that is being made.

calculating the figures is the  Though this method is accurate it

biggest disadvantage that this is considered to be complicated as

method has compared to other methods.

4.2 Preparation of Project Plan using Critical Path

Project Plan

Project Title Offering mobile services for car

maintenance and repairs at home
Project objectives 1. To ensure that customers get
exceptional car maintenance and repair
services at home
2. To ensure to build a bigger customer
base
3. To satisfy the customers with
proficient and trustworthy services
4. To make profits from the new service.

24
 Project budget £40000
Project duration 40 days

To create a network diagram the following sequence of work is followed:

Project Description of tasks Duration in Predecessor

Tasks Days
K Assign a manager to the project 1
L Project and analyse the realism of the 3 K
project
M Recognize and gather the reserves 5 K
needed
N Obtaining the indispensable tools 7 M
and vehicles
O Fitting the tools in the vehicles 5 N
P Training the drivers and the 7 K,O
mechanics
Q Examining the services on a small 6 P
sample
R Endorsing the services in local areas 6 Q
S Onset of the mobile services 0 R

Following is the network diagram:

25
Critical Path:

Series Network path Sum of duration Duration in

days
1 K-L-P-Q-R-S 1+3+7+6+6+0 23 days
2 K-M-N-O-P-Q-R- 1+5+7+5+7+6+6+0 32 days

Thus, the chosen critical path is 32 days i.e. K-M-N-O-P-Q-R-S

4.3 Calculation of Net Present Value and Internal Rate of Return

Net Present Value

For judging the feasibility of the project being undertaken the NPV is calculated as:

NPV = Total Present Value of Net Cash Flow – Initial Investment

Calculation of Net Present Value:

Year Revenue Operating Rent per Total Net Net cash

cost year expenses cash flow
flow
1 200000 150000 40000 190000 200000 10000
-
190000
2 250000 180000 40000 220000 250000 30000
-
220000
3 280000 210000 40000 250000 280000 30000
-
250000
4 300000 240000 40000 280000 300000 20000
-
280000

26
Depending upon the above cash flows, the NPV is:

Net present value = total present value of cash flows – initial investment

Year Net Cash DCF factors Present Value

Flow @10 per cent
1 10000 .909 9091
2 30000 .826 24793
3 30000 .751 22539
4 20000 .683 13660
Total Present Value of Net cash flow 70084

NPV = PV of net cash flows – initial investment

= 70084 – 40000

= £30084

Calculation of Internal Rate of Return

IRR
Year NCF
Year 0 -40000
Year 1 10000
Year 2 30000
Year 3 30000
Year 4 20000
IRR 37.9%

Since, both the NPV and the IRR for the new project undertaken by Speedy Fitters is

on the higher end, the company shall carry the project forward in order to expand its

business.

27
Conclusion

It is important for the company or the establishment to conduct a mathematical

analysis for undertaking effective business decisions. For most of the observations

that have been made, the relationship that is shown between the students and the

subjects is clearly seen. It has also been assessed that opening up a new school would

be a good decision for ESE. Analytical business decision not only helps in taking

calculated decisions but also discloses the trends that have been followed to promote

effective decision making.

28
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measurement procedures (Vol. 729). John Wiley & Sons.

2. Goetsch, D. L and Davis, S. B. (2014). Quality management for organizational

excellence. pearson.

3. Bazerman, M and Moore, D. A. (2012). Judgment in managerial decision

making.

4. Pettigrew, A. M. (2014). The politics of organizational decision-making.

Routledge.

5. Berenson, M., Levine, D., Szabat, K. A., andKrehbiel, T. C. (2012). Basic

business statistics: Concepts and applications. Pearson Higher Education AU.

6. Bernroider, E. W., and Stix, V. (2015). On The Applicability of Data

Envelopment Analysis for Multiple Attriliute Decision Making in the Context

of Information Systems Appraisals. Communications of the IIMA, 6(2), pp.

13.

7. Ferrell, O. C., and Fraedrich, J. (2014). Business ethics: Ethical decision

making & cases. Cengage learning.

8. Zsambok, C. E., and Klein, G. (2014). Naturalistic decision making.

Psychology Press.

9. O'Leary, Z. (2013). The essential guide to doing your research project. Sage.

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methods for comparing adaptive interventions. Psychological methods, 17(4),

457.

29
11. Clark, G. (2013). 55 Secondary data. Methods in human geography: A guide

for students doing a research project, 57.

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International Publishing.

30