Regent College

Higher Education

Awarding Body:
Course: HND Diploma in Business
Name of the Subject: Business Decision Making.

Assessor:
Submitted By (Student Name):
Student ID:

Number of words: 2500

Table of Contents
2

Introduction........................................................................................................................1

Task 01...............................................................................................................................2
3.1

Plan for the gather ion of primary and secondary data for a given business problem 2

3.2

Survey methodology and sampling frame...................................................................3

3.3

Questionnaire...............................................................................................................4

3.4

Information for decision making and analysis of results and data..............................5

3.4.1

Mean, mode, median and quartiles......................................................................5

3.4.2

Importance of the above calculations and the recommendations.........................7

3.4.3

The range, inter quartile range and the standard deviation..................................8

3.5
How quartiles, percentiles and the correlation coefficient are used to draw useful
conclusions in a business context...........................................................................................9
4

Task 02.............................................................................................................................11
4.1

Graphs, conclusions and Business presentation........................................................11

4.2

Business report..........................................................................................................14

4.3

Information processing tools.....................................................................................15

4.4

Project plan and critical path.....................................................................................16

4.5

Financial tools for decision making..........................................................................18

Conclusion........................................................................................................................20

References........................................................................................................................21

Bibliography.....................................................................................................................22

Introduction

In the modern business era, successfulness of the companies importantly rely on number of
decision making procedures undertaken by their directors, managers, etc. Timely, effective
decisions enable companies to face the changes in the internal and external business
environments, identifying the market trends and changing customer requirements allowing
the companies to achieve a competitive edge in the market. Under this assignment the
decision making process and the options used by the companies will be identified in detail
paying attention to the market research methodologies and options of obtaining data. The
effective usage of Gantt charts and Network diagrams will be discussed presenting the
number of data representation options like the graphs and charts.

2
2.1

Task 01
Plan for the gather ion of primary and secondary data for a given business
problem

As per Kothari (2009, p 95) usage of a proper data gather ion method is very much vital for
the success of any new business. A data gather ion method should be convenient for the
researcher as well as to the sources from which the data will be gathered. In obtaining the
required for the research both the primary and secondary data can be used properly which
will allow the researcher to obtain a large variety of data that will guide him in identifying the
contemporary issues prevailing the Restaurant in London.
In gather ing the data that are required to carry out the required market survey, Restaurant in
London will have to select a suitable sampling methodology which will have to be used in
gather ing the required data. As per Bethlehem (2009, p 106) a sampling method is required
as the organisation will not be in a position to gather the data from all the customers in their
niche market. So they will have to select a group or a set of individuals from which they can
obtain the required data which will represent all its customers.

2.2

Survey methodology and sampling frame

In gather ing the data that are required to carry out the required market survey, Restaurant in
London will have to select a suitable sampling methodology which will have to be used in
gather ing the required data. As per Bethlehem (2009, p 106) a sampling method is required
as the organisation will not be in a position to gather the data from all the customers in their
niche market. So they will have to select a group or a set of individuals from which they can
obtain the required data which will represent all its customers. Random sampling is where
each and every member in the target market has an equal probability of getting selected for
the sample. Stratified sampling is where the entire population will be divided into number of
groups and then the individuals will be selected using the random sampling method. In this
situation Restaurant in London can properly use the simple random sampling method given
the market is a niche market. As the market is not a big one the simple random sampling
method will allow Restaurant in London to conveniently gather the data required for the
market survey. Survey methodologies will be used in order to gather the data from the
selected sample. The number of survey methodologies will be face to face conversations,
telephone conversations, online surveys and etc. In this situation Restaurant in London can
properly use a questionnaire to gather the required data as the market is a niche market. That
will allow Restaurant in London to take a friendly approach towards customers getting closer
to them.

2.3

Questionnaire

In carrying out the required market research it will be very much vital for Restaurant in
London to obtain a variety of information from the market and customers that will enable
them to identify the market position properly. Identification of the exact market position will
enable Restaurant in London to develop strategies to expand their market across London. In
obtaining the required information Restaurant in London can use number of data gather ion
methodologies but using a properly prepared questionnaire will enable them to properly
obtain the required data. As explained by Gillham (2008, p 88) a questionnaire for Restaurant
in London which can be used in gathering the data from the customers can be developed as
follows.
Questionnaire
1

What are the number of types of restaurants you visit and what is the most preferred

2
3

restaurant type?
What is the reason for you prefer that the specific type of restaurant?
Are you satisfied about the value you get from the sauce when compared with the price

4
5
6
7
8
9

you pay?
What is the source from which you got to know about the above restaurant?
Are you satisfied about the availability of the above mentioned restaurant?
What are the further that should be made into the specific restaurant?
What are the times you usually visit a restaurant?
How often you visit a restaurant?
What is your monthly income level? {Low / medium / high}

2.4

2.4.1

Information for decision making and analysis of results and data

Mean, mode, median and quartiles

The given data set should be arranged in the ascending order before calculating the mean,
mode, median and quartiles which can be showd as follows.
3, 4, 4, 5, 5, 6, 6, 7, 7, 7, 7, 7, 7, 8, 8, 9, 10 , 16, 33
The mean
As explained by Urdan (2005, p 33) the mean will be the average of a given data set. The
mean for the above data set can be calculated as follows.
Mean = [x1+x2+x3+ xn] /n
Mean = [3+4+4+5+5+6+6+7+7+7+7+7+7+8+8+9+10+16+33] /19
= 8.368
The mode
The mode can be identified as the most repeated element of a given data set. The most
repeated element in the above data set is 7 where it will be the mode of the above data set.
The median
As per Rubin (2012, p 59) the middle value of a given data set will be interpreted as the
median of that data set. The median of the given data set will be calculated as follows.
If the numbers in the list are n, then the Median would be,
Median = [n+1] /2 th element.
Median = [19+1] /2 (as the numbers in the above data set is 19)
= 10th element
=7
The quartiles

As per Griffiths (2008, p 92) the quartiles will show the dispersion of a given data set where
the quartiles will divide the given data set into three equal parts. Three quartiles will be
calculated for a given data set namely the lower quartile, middle quartile and the upper
quartile. The middle quartile of a given data set will be the same as the median of the data set.
So the middle quartile in this situation will be 7 which is the median. The lower and the upper
quartiles will be calculated as follows.
Lower Quartile = [n +1] *
= [19+1] * th element
= 5th element
=5
Upper Quartile = [n+1] *
= [19+1] * th element
= 15th element
=8

2.4.2

Importance of the above calculations and the recommendations

As explained by Black (2011, p 520) in this scenario the average number of customers visited
to the restaurant can be identified as 8.368 where the restaurant in London can identify the
most probable number of customers that will come per month. The most repeated number of
customers placed per week can be identified as 7 supporting the above average situation. And
even the median of the above data set is 7 which further supports the above conclusion. So it
will be important to the restaurant in London to be ready to cater to at least 7 or 8 number of
customers per week being equipped with the relevant human and other resources. But there
will be deviations from this average situation which is clearly showed through the above data
set. So the restaurant in London should be ready with the required resources to cater to such
exceptional situations which can be due to a seasonal fluctuation or another market or
environmental situation. But anyway developing a more customer friendly and a convenient
number of services system will enable the restaurant in London to attract more and more
customers through their website increasing the number of number of customers received per
month.

2.4.3

The range, inter quartile range and the standard deviation

The range
As per Howell (2008, p 79) the range of a given data set can be identified as the difference
between the highest and the lowest values of a given data set. The range of the above data set
can be calculated as follows.
The range = Highest value lowest value
= 33 3
= 30
Inter quartile range
As per Sharma (2007, p 138) the difference between the upper and lower quartiles will be
showed through the inter quartile range. The calculation of the upper and lower quartiles will
be as above. Using the above calculations the inter quartile range of the above data set can be
calculated as follows.
Inter quartile range = [Q3 - Q1]
Inter quartile range = [8 5]
=3
The standard deviation
As explained by Urdan (2005, p 33) the standard deviation will show the deviation of the data
in a given data set from the mean of that data set. This will simply be a measure of dispersion
identifying the average of the elements in the given data set. The standers deviation of the
above data set will be calculated as follows.
n

Standard deviation =

( xmean)2
k=0

Standard deviation = 6.4089

/n

2.5

How quartiles, percentiles and the correlation coefficient are used to draw useful
conclusions in a business context

The quartiles and the percentiles can be identified as the mathematical options that are used
to identify the dispersion of a given data set. As per Hardman (2009, p 99) the quartiles will
divide a given data set into three equal parts allowing the identification of the dispersion. In
the above scenario, the lower quartile is 5 indicating that 25% of the elements in the given
data set are equal or lower than 5 in value. The middle quartile which is the same as the
median is equal to 7 indicating that 50% of the elements in the above data set are equal or
lower than 7 in value. The upper quartile is 8 indicating that 75% of the elements in the above
data set are equal or lower than 8 in value. These data can be properly used by the restaurant
in London in identifying the most likely situation of the number of customers per week and to
identify the changes in the number of customers along with time and value. So in the above
scenario the number of number of customers received per week lies around the values of 7
and 8 which shows the most likely scenario that the restaurant in London will have to tackle.
The percentiles will divide a given data set into 100 equal parts and the interpretation of the
percentiles will be the same as that of quartiles. The calculation of the percentiles will be
useful if there is a large number of elements in the given data set.
The importance of mean as the best measure
As per Kumar (2006, p 145) the mean of a given data set will show the average of a given
data set which is more convenient and easy to be understood by the users. In the above
situation the average number of number of customers received per week can be identified as
8 where the restaurant in London should be ready to cater to at least 8 number of customers
per week. In that light the organisation will have to be equipped with the relevant resources
including the material and the human resources in order to deliver at least 8 number of
customers per week. The upper quartile of the given data set is also 8 which is same as the
mean indicating that 75% of the times the number of number of customers received per week
is equal or lower than 8 insisting the importance of the mean as the best measure in this
scenario. However 25% of the values in the data set is higher than 8 which are the extreme
situations deviating from the mean. So it will be advisable to the restaurant in London to be
ready to tackle such extreme situations without losing the customers. So the mean can be
used as the best measure in generating business decisions with regard to the given situation.
Pearsons coefficient of skewness

As explained by Munro (2005, p 46) the Pearsons coefficient of skewness will show the
skewness of a given data set as a numerical value. This importantly handles with the
graphical representation of the data set through a symmetry where in the situations of the
mean, mode and the median are not similar the data symmetry will be positively or negatively
skewed based on the values of the above measurements. The Pearons coefficient of skewness
for the above data set can be calculated as follows.
Pearsons coefficient of skewness = 3* [mean median] / Standard deviation.
= 3*[ 8.368 7] / 6.4089
= 0.6404
The coefficient of 0.6404 shows that the above data set is positively skewed indicating the
number of number of customers received per week lie below the mean of the given data set.

10

Task 02

3.1

Graphs, conclusions and Business presentation

To present we can use Microsoft PowerPoint in each slide containing following number of
details.
Data representation through bar graphs
Year

Sales

Marketing

profits

375

45

145

495

65

160

590

88

242

645

99

218

495

50

180

575

78

220

665

97

250

810

118

290

organisational performance

8
7
6
sales

marketing

profits

3
2
1
0

100

200

300

400

500

600

700

11

800

900

Table
1 Data
of

Sales, marketing expenses, profits during the last eight years

Data representation through pie charts

Sales

8; 17% 1; 8%
2; 11%
7; 14%

3; 13%

6; 12%

4; 14%

5; 11%

Sales - each year - as a percentage of the total sales

12

Profits

8; 17% 1; 9%
2; 9%
7; 15%

3; 14%

6; 13%

4; 13%

5; 11%

Profits - each year - as a percentage of the total profit

Marketing

8; 18%

1; 7%
2; 10%
3; 14%

7; 15%
6; 12%

4; 15%
5; 8%

Marketing expenses in each year as a percentage of the total marketing expense

Generating the trend equation through a scatter diagram

13

900
800
700
600

f(x) = 44.05x + 383.04

R = 0.67

500
sales revenue 400

sales

300

Linear (sales)

200
100
0
0 1 2 3 4 5 6 7 8 9
year

Chart 5 Trend Analysis through the Scatter Diagram

Trend Line equation
y = 44.048x + 383.04

14

3.2

Business report

As per Brechner (2008, p 553) when analysing the above data it is clearly notable that there is
a trend in the sales figures, marketing figures and even in the profit figures over the eight year
period. There is a linear relationship between the sales and the marketing expenses. As the
marketing expenses have been increased gradually the sales figures have increased indicating
that the organisation is operating in a competitive environment where the market share of the
other players can be gathered through effective marketing and product number ofiation. The
increase in the marketing expenses will allow the organisation to carry out more effective
marketing campaigns being closer to the customers. That will attract more and more
customers towards the organisational products leading the sales figures to increase given the
linear relationship. The finance department should keep on investing in the marketing
activities rather than reducing the marketing budget which will lead to a loss in market share.
So the organisation should keep on developing new products and launching them to the
market while retaining the existing market share through continuous investments in the
marketing budget. That will finally result in the overall profits of the organisation to increase.

15

3.3

Information processing tools

As explained by Kaid (2004, p 413) the information processing systems will include the
processes, rules and guidelines in order to process data into meaningful information. When
Computing devices are used in such processes that will enable more effective, accurate and
efficient data processing allowing the organisation to make effective and quick decisions. The
number of levels within the organisation will be using number of information processing
systems in order to make number of business decisions. The strategic level will use the
decision support systems and management information systems to analyse the data in
developing strategic decisions. The tactical level will be using management information
systems in order to make short to medium term business decisions. The operational level will
use the transaction processing systems and information processing systems in order to make
decisions regarding the day to day business operations. The usage of these information
systems will allow the organisation to obtain more effective, efficient and reliable
information which can be used for effective decision making.

16

3.4

Project plan and critical path

Activity

Duration

Preceding

Preliminary

(Weeks)
5

activity
-

design
Materials research

Obtain material

quotas
Draw up plans

Marketing research

Costing

G
H

Get planning permissions

Design and

4
6

D
B, E

research
Pricing estimates

Final report

F, G, I

Operational Outcomes

Following will be the way in which data represent in the network diagram.
ID of the activity
Earliest Starting time
Data representation in the Network Diagram

The Network Diagram

17

Time period (Weeks)

Latest Starting time

Gantt chart

18

3.5

Financial tools for decision making

The

payback

Year

As explained by
p

163)

period

Net Cash

Cumulative Net Cash

Flow

Flow

Morrell (2007,

this

Y0

(500 000)

(500 000)

calculation will

identify the time

Y1

200 000

(300 000)

consumed

repay

an

Y2

120 000

(180 000)

investment

which can be

Y3

120 000

(60 000)

calculated

Y4

100 000

Y5

60 000

follows for the

to
as

given data set.

Table 3 of the payback period

The payback period = 3 years + 60000/100000 years

= 3.6 years
Calculation of the NPV
As per Lasher (2007 p, 436) the NPV calculation will show the present value of the future
cash flows discounted using the cost of capital rate of the organisation.
Year

Net Cash Flow

Discounting factor

Present value

Y0
Y1
Y2
Y3
Y4
Y5

(500 000)
200 000
120 000
120 000
100 000
60 000

1
0.909
0.826
0.751
0.683
0.621

(500 000)
181800
99120
90120
68300
37260

The PV calculations

NPV for the project = (500000) + 181800 + 99120 +90120 + 68300 + 37260

19

= (23400)
Calculation of ARR
As per Brabner (2007, p 6) in the below calculation it will show the average annual profit
before
tax
the

as

a
total

investment
calculated as

Year

Net Cash Flow

Depreciation

Profit

Y1

200 000

100 000

100 000

Y2

120 000

100 000

20 000

Y3

120 000

100 000

20 000

Y4

100 000

100 000

Y5

60 000

100 000

(40 000)

The profit calculations

ARR = (Average profit before interest and tax / Initial investment) * 100 %
= [(100000+20000+20000-40000) / 5] / 500000] * 100 %
= 4%

20

interest

and

percentage of
initial
which can be
follows.

Conclusion

In the modern business era success of a company will depend on how the decision making
will carry out number of parties in the organisation. In the process of taking number of
decisions regarding business activities it is important to use proper information and data
analysis options including proper data gather ion methodologies. Through using information
systems will enable and increase the accuracy of data processing which will then facilitate the
reliable decision making. Companies can largely use the number of charts and graphs in
presenting the information gathered. The network diagrams and the Gantt charts can be
properly used in managing number of business projects. In assessing investments the
companies can use the options like NPV, ARR and payback period. But the final investment
decision should be based on the NPV value.

21

References

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p 106
Black, K. (2011), Business Statistics: For Contemporary Decision Making, 7th Edition, John
Wiley & Sons, p 520
Brabner, A. (2007), Corporate Finance - Assignment One, GRIN Verlag, p 6
Brechner, R. (2008), Contemporary Mathematics for Business and Consumers, 5th Edition,
Cengage Learning, p 553
Chary, (2004), Production and Operations Management, 3rd edition, Tata McGraw-Hill
Education, p 8
Gillham, B. (2008), Developing a Questionnaire, 2nd Edition, Bloomsbury, p 88
Griffiths, D. (2008), Head First Statistics, Illustrated, O'Reilly Germany, p 92
Hardman, D. (2009), Judgment and Decision Making: Psychological Perspectives,
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Howell, D.C. (2008), Fundamental Statistics for the Behavioral Sciences, 6th Edition,
Cengage Learning, p 79
Jain, K. (2007), Financial Management, 5th Edition, Tata McGraw-Hill Education, p 41
Kaid, L.L. (2004), Handbook of Political Communication Research, Illustrated, Routledge, p
413
Kothari, C.R. (2009), Research Methodology: Options and Options, 2nd Edition, New
Age International, p 95
Kumar, D. (2006), Six Sigma Best Practices: A Guide to Business Process Excellence for
Diverse Industries, Illustrated, J. Ross Publishing, p 145
Lasher, W. (2007), Practical Financial Management, Cengage Learning, p 436
Morrell, P.S. (2007), Airline Finance, 3rd Edition, Ashgate Publishing, Ltd, p 163
Munro, B.H. (2005), Statistical Options for Health Care Research, 5th Edition, Lippincott
Williams & Wilkins, p 46
22

Nykiel, R.A. (2007), Handbook of Marketing Research Methodologies for Hospitality and
Tourism, Illustrated, Routledge, p 25
Olson, J.E. (2003), Data Quality: The Accuracy Dimension, Illustrated, Morgan Kaufmann, p
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Oppenheim, A.N. (2000), Questionnaire Design, Interviewing and Attitude Measurement, 2nd
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Rubin, A. (2012), Statistics for Evidence-Based Practice and Evaluation, 3rd Edition,
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Schwalbe, K. (2010), Information Technology Project Management, 6th Edition, Cengage
Learning, p 218
Sharma, J.K. (2007), Business Statistics, 2nd Edition, Pearson Education India, p 138
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23