UNIT 6: Business Decision Making

Division of Business
Course: HND  Level 5  Business
Year: 2013/14
Student Name:
UNIT 6: Business Decision Making
Lecturers Name: Mr E Ndi-Wanki
Date Issued: 15th of September 2014
Completion Date: 23rd of December 2014
           Fail               Pass             Merit             Distinction
P1
P2
P3
P4
P5
P6
P7
P8
P9
P10
P11
P12
P13
P14
P15
P16
M1
M2
M3
D1
D2
D3
Learning Outcomes: 1 Be able to use a variety of sources for the collection of data, both primary and secondary 2 Understand a range of techniques to analyse data effectively for business purposes 3 Be able to produce information in appropriate formats for decision making in an organisational context 4 Be able to use software-generated information to make decisions in an organisation.
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LO1: Be Able to Use a Variety of Sources for the Collection of Data, both Primary and Secondary

TASK 1
Assume you work as the Marketing Executive in an organisation of your choice.  This organisation would like to find out about the viability of launching a new product in the UK growing Smartphone market.
The senior management team has decided to conduct both qualitative and quantitative research in the London area to test the market. You have been given the responsibility of searching for market research agencies to carry out this task.
You have been given the responsibility of conducting this research for this organisation. The Board is willing to spend a maximum of £30,000 for this project but would like to see how you plan to do it.
Propose a marketing research plan to obtain information in the area. This research plan, also known as a research brief, is to be sent to three potential marketing research agencies that will respond with a detailed marketing research proposal.
Your research plan should include the following sections:
  • A brief background of this context, Rationale (briefly) (1.1)
  • Objective of research (Specific, measurable, achievable, realistic, timed), data collection; Secondary and primary, qualitative and quantitative techniques (1.1)
  • Present your survey methodology section and sampling frame (1.2)
  • How you plan to analyse the data (1.1)
  • Timeframe within which you will be able to complete this research. (1.1)
  • A budget section for this research. Do not exceed the £30,000 budget. (1.1)
  • Design a sample questionnaire for the Board to consider. (1.3)

LO 2 – Understand a range of techniques to analyse data effectively for business purposes
TASK 2
John, the owner of a small clothing shop, realised the importance of analysing the store’s product sales using statistical analysis while studying Business in college. He has collected some data but is finding it difficult to analyse it. So he has decided to hire you as his consultant.
The data below shows the number of cloths sold in different price spent by 100 customers

Amount Spent (£)
No. of clothing items
20-30
12
30-40
15
40-50
16
50-60
20
60-70
14
70-80
10
80-90
7
90-100
6


You are required to calculate and analyse the following:
1.     Mean, Median and Mode and advise him on the best price range for his cloths.  (A.C’S 2.1 & 2.2)
2.    Looking at the results analyse the data such as the range and standard Deviation and how this information will help John. (A.C 2.3)
3.    25th Percentile (Lower Quartile) and 75th Percentile (Upper Quartile) and explain the use of percentile would aid John in making decisions for his store. (A.C 2.4)
4.    Explain how inter-quartile range would help John make decisions in his shop.  (A.C 2.4)

You should include the following on your answer:
1.     Show all formulas and workings clearly
2.    Provide explanations where required
3.    The methodology you used need to be sharp, not results are accepted without outlining the calculation process












LO3 - Be able to produce information in appropriate formats for decision making in an organisational context
LO4 – Be able to use software-generated information to make decisions in an organisation
TASK 3
You are workingin WLCBMSas a Business Analyst;the Principal has provided you with the following data:

Year
Sales (£’000)
Cost(£’000)
Profit(£’000)
2002
250
200
50
2003
280
190
90
2004
300
200
100
2005
310
200
110
2006
350
190
160
2007
330
190
140
2008
300
180
120
2009
280
160
120
2010
280
170
110
2011
300
170
130
2012
350
190
160

You have been asked by the Board to forecast future Sales and Profit for the upcoming Annual Board Meeting.


You should include the following on your answer:
  • Produce a Column/Bar graph showing Sales, Cost and Profit using Microsoft Excel.(A.C 3.1)
  • Produce a sales and profit scattergraph showing trend lines and project sales and profit for 5 years into the future. (3.2)
  • Show the regression equation separately on the graph.(4.1)

TASK 4
The Board meeting ofWLCBMS is fast approaching and you have been asked to present your findings in the meeting. You have to produce a Report and a PowerPoint Presentation to the Board:
In your PowerPoint:
1.     Explain what forecasting is and its benefits to an organisation.
2.    Explain the relation between sales, cost and profit of the organisation.
In your report
1.     Discuss the future prospects of the organisation.
You should include the following on your answer:
·         Use Microsoft PowerPoint to make a presentation (minimum of 10 slides) (3.3)
·         Write a formal business report using the correct format. (3.4)



LO4 – Be able to use software-generated information to make decisions in an organisation
TASK 5
The activities involved in a fashion project are given below:
Description
Activity
Preceding Activity
(Days)
Market research
A
-
4
Developing the concept
B
A
2
Testing the concept
C
A
36
Project presentation and CEO approval
D
B
15
Budget allocation
E
D
4
Recruitment and personnel training
F
E
9
Manufacturing starts
G
F
9
Quality checks
H
C
2
Product prelaunch
I
B
10
Product features amendments
J
D
9
Product launch
K
G,H,I,J
20
Follow Up
L
K
20




You are required to:
1.     Prepare a network diagram for activities using Microsoft Project or open project(4.2)
2.    Calculate the Project Duration. (4.2)
3.    Clearly mark the Critical Path. (4.2)

You should include the following on your answer:
·         Use Microsoft Project or open project to show the network diagram, critical path and project duration.

TASK 6
WLCBMS is considering which of two mutually exclusive projects should be undertaken. The Finance Director suggested that the project with the higher NPV should be chosen whereas the Managing Director suggested that the one with the higher IRR should be undertaken. Both projects have the same initial investment and length of life. The company anticipates a Discounting Factor of 10% and future cash flows of the projects are as follows:
Year
Project A
Cash flow
Project B
Cash flow
Investment
-200,000
-200,000
1
30,000
50,000
2
85,000
75,000
3
95,000
105,000
4
80,000
60,000
5
40,000
35,000

Your task is to:
1.     Calculate the NPV and IRR of each project. (4.3)
2.    Recommend, with reasons, which project you would undertake (if either).(4.3)
You should include the following on your answer:
·         Calculate the NPV and IRR.
·         Use 20% as the second Discounting Factor while calculating IRR



















For Merit and Distinction grading, student must meet all the criteria that show all the evident indicated in this grading sheet.

Merit descriptors

Evidence required
Distinction descriptors
Evidence required

M1

·         Identify and apply strategies to find appropriate solutions
“Statistical data can be used by companies in various ways to analyse current performance and future projections.”

Using the data in Q2 produce a Histogram and a Frequency Polygon in MS Excel. Please clearly label the X-axis, Y-axis and Legend Keys.
Discuss whether statistical data can be used for making future business decisions and what are the possible advantages of using statistical data for these purposes.





D1
·         Use critical reflection to evaluate own work and justify valid conclusions
D2
Take responsibility for managing and organising activities

D3
Demonstrate convergent, lateral and creative thinking
DISTINCTION ONE, TWO &THREE
Note that this question is linked to learning outcome 4
“Financial evaluation is an important step while making Capital Investment Decisions.”
As a new finance executive in a bank, write a memo to your Finance Director and critically reflect on this statement. Evaluate whether the Capital Investment Appraisal (CIA) process and the tools used for financial evaluation are useful to the decision making process and justify your conclusions. 


You should include the following on your answer:
Define CIA process and discuss the steps involved in the process.
Assess the tools used in financial evaluation (example ARR, Payback period, NPV and IRR) and discuss how useful these tools can be to a bank in the decision making process.

M2

·         Select/design and apply appropriate methods/techniques
Use MS Excel for producing the Histogram and the Frequency Polygon.
Discuss the use of statistical data for future decision-making.



M3

·         Present and communicate appropriate findings
From the data available in Q 4.2, prepare a Gantt chart and state the benefits of using this Gantt chart as a Project Management Tool.

You should include the following on your answer:

§ Use Microsoft Project to create a Gantt chart.
§ State the benefits and the use of Gantt chart in an organisation as a     Project   Management Tool.

·          




Textbooks
Newbold P et al – Statistics for Business and Economics(Pearson Education, 2009) ISBN: 9780135072486
Day A – Mastering Financial Mathematics with Excel: A Practical Guide for Business Calculations (Financial Times/Prentice Hall, 2005) ISBN:
9780273688662
Beynon-Davies P – Business Information Systems(Palgrave Macmillan, 2009) ISBN: 9780230203686

Websites
www.bized.co.ukBized provides a selection of teaching and learning resources
http://www.revisionworld.co.uk/  Free GCSE, AS, A2 (A-Level) revision
resources
www.ons.gov.uk  Office for National Statistics
www.statistics.gov.uk  UK National Statistics






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