Assignment on Business Decision Making

Assignment on Business Decision Making

This Assignment on Business Decision Making discusses the methods, techniques and tools which are used to process data and derive information which helps in the decision making process of a business. The outbound tour operator company intends to develop and launch a new proposed tour product for which the research will be conducted about the customer attitude, preferences and buying behaviour in relation to tour products. The survey methodology refers to as the process that will be used for conducting the survey including the method for collection of data, summarising it and make analysis to draw valid conclusions. The results and findings will be analysed and evaluated to draw valid conclusions and present reports for decision making.

Task 1

A Plan for collection of primary and secondary data

Sources for collection of primary and secondary data

Primary Sources –These are the sources used for the collection of first hand fresh data. This is the type of data which is collective exclusively for the purpose of research and is collected by the researcher for the first time from the direct interaction with the target population (Olsen, 2012). The sources which are used for the collection of primary data include use of questionnaires for gathering responses, conducting personal interviews for getting the ideas and opinions, focus target group method using observations technique applied on the target group of people, conducting enquiries from peers and competitors etc.

Secondary Sources– These are the sources which provide secondary for of data. The secondary form of data sis the data which is second hand data. It means such type of data has already been collected by someone else for some other purpose or during some previous research but relates to the subject matter and objectives of research and can be used for the research project. The sources which are used for the collection of secondary data during the survey or research include both internal and external sources such as government publications, corporate reports, trade, business and professional associations, media sources, universities, foundations, online journals and publications, websites etc.

Plan for data collection

B Survey methodology, sampling frame and strategy

Survey Methodology–The survey method will comprise of identifying the target population which will comprise of customers of company presently associated with the company or remained the customers in past, competitors of company in the same industry or business, peers and business partners of company etc. The questionnaires will be sent to them through mails or in person and responses will be collected from them. Also the enquiries will be conducted from other tour companies, tour operator and travel agents to identify customer perception, preferences, attitude and buying behaviour with regards to the tour products. The corporate reports and media and government publications will be used to extract data about using trends of tour products and customer preferences and other required data will be obtained from various relevant websites (Habib, 2014).

Sampling frame–Sampling frame refers to as the frame which includes the details of the target population which will be used for collection of data. The sampling frame for collection of primary and secondary data for the research of the company to gather information about the proposed new tour product for the company will comprise of the following:

• Present customers of company
• Past customers of company
• Tour companies in travel and tourism industry
• Business partners and peers of company
• Government and media publications

From the sapling frame the sample will be selected for the analysis using simple random sampling method. Under this method sample is selected from the sampling on random basis so that each and every source has an equal opportunity of being selected for the sample the sample is the part of population which represents the whole population efficiently in terms of nature, characteristics and quality of responses. The sample size that will be used for selecting the sample on random basis will be 50%. Thus out of the complete sampling frame, a sample of 50% will be selected on random basis so that each element of the sampling frame gets an equal and fair chance of selection.

A. Questionnaire design to carry out survey

The following is the questionnaire designed for carrying out the survey to assist in decision making with regards to the launch of new tour product by the company;

• Select your gender

              Male
              Female

• Select your age group

            15-25 years
            26-40 years
           40-65 years
           Above 65 years

• Select your income range

         £0 - £20000
         £21,000 - £50,000
         £51,000 - £75,000
         £75,000 - £100,000
         Above £100,000

• What is your residential status for UK?

          Resident
          Non-resident
          Other

• Do you like travelling to different places?

          Yes
          No
          Sometimes

• Which of the following do you consider to be the most important factor for selection of tour product?

          Price
         Quality
         Services
          Location

• Which type of tour do you prefer based on location?

         Domestic
         International
         Any

• How often do you go on trips in a year?

       Once in a year
       2-3 times
       4-6 times
       Every month
       Never

• How much amount can you afford to spend on tour products?

       Up to £ 25,000
       £25,000 - £50,000
       £50,000 - £80,000
       £80,000 - £100,000
       More than £100,000

• Are you satisfied with the existing tour products offered by the tour operators and companies in London?

      Satisfied
      Highly satisfied
      Unsatisfied
      Highly unsatisfied
       Neutral

• Any suggestion for the development of new proposed tour products and packages by tour companies or tour operators and travel agents?

…………………………………………………………………………………………………………………………………………………………

Task 2

A Summarising data collected using frequency tables and representative values and analysis of results to draw valid conclusions

Frequency Tables– These are the statistical tables which are used for summarising the responses collected as part of a survey method or research method. These tables describe the details of responses with regards to each option under evaluation. The statistical calculations for the analysis and conclusion to assist in decision making based on the results of findings(Weygandt, 2015). The following are the frequency tables representing the summary of the results obtained from the survey carried out for the proposed new tour product for the outbound tour operator company in the form of responses:

Residential status for UK

Important factor for selection of tour product

Frequency of trips annually

Spending on tour products

Representative Values –These are the measures which are used for the statistical calculations such as mean, median and mode for summarising the statistical vales or a set of data values in relation to responses of the survey. The representative values of the responses received from the survey with regards to the spending on tour products by the customers can be calculated as follows:

Mean – It is the average of the data values which is calculated by adding all the values and dividing the sum by number of values.  The mean of the responses is calculated as follows:

Mean = Sum of values/ Number of values

            = 18+25+10+5+12/5

            = 14

The mean of the responses is 14 which mean that that n an average 14 persons will spend on the tour products of the company since the average of responses for the spending on the tour product by the customers is 14.

Median - It is the representative value which represents the middlemost value of the data series when arranged in ascending order (Manikandan, 2011). It is calculated by identifying the middle term.

Median = N+1/2th term

            = 5+1/2 th term

            = 3^rd term

            = 12

The median of the responses is 12 which mean that the middle value of the responses with regards to the spending on the tour products is 12. This means that the middle of the responses for spending is 12.

Mode – It is the data value which denotes the highest frequency. Mode is the highest value of the data. The mode of the responses is calculated as follows:

Mode = Highest frequency

            = 25

The mode of the responses is 25 which mean highest 25 customers will be able to spend on the tour products. This value represents the expense range of £25,000 - £50,000. This means that the highest number of consumers will send an amount between these ranges on the tour products.

B Analysis of data using measures of dispersion

Measures of dispersion are the values which are used to calculate the deviations of the statistical values from their averages. The measures of dispersion include the standard deviation which is the measure used to estimate the deviation of the mean from its path. It is the under root of variance. The standard deviation of the responses is calculated as follows:

Standard Deviation =√ ∑ (Value – Mean) 2/N

                                    =√193/5

                                    = 6.21

The standard deviation of the responses is 6.21 as against its mean of 14. This means that there is less risk of the deviation of the responses from the mean since lesser standard deviation indicates lesser risk and similarly higher standard deviation indicates higher risk of deviation of mean from its at and occurrence of variances.

C  Explanation of how quartiles percentiles and correlation co efficientcan be used to support decision making.

Quartiles – These are the measures of dispersion which are used to measure the deviation or dispersion of the data values in terms of their value represented by the quartiles. T divides the data values in four equal parts where each part will represent 1/4^th of the data and 25% of the data values. These are helpful in making decisions for the business since they help in identifying which data value falls in which quartile and how much weightage it has.

Percentiles – These are the values which are used to divide the data values in 100 equal parts in order to identify the measure of dispersion of each value in the form of its ranking. Each percentile represents 1/99^th part of the data. The percentiles are used in the decision making process of business it helps in estimating the ranking of the data values and evaluate what values of data are lie above or below which values so that the decision about the priority of responses can be made.

Correlation Coefficient– This is the measure of dispersion which is used to identify the correlation between two variables. A positive correlation means that the change in both the variables will be in same direction and the negative correlation means change in both the variables will be in opposite direction. A correlation coefficient of 1 represents perfect correlation between two variables whether positive or negative. It is used in business decision making since it helps in identifying the degree of relationship existing between two factors related to business operations and how the change in one variable will affect another (Odum, 2012)

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Task 4

A Preparation of project plan and determination of critical path for launch of new project using appropriate information processing tools

Information processing tools are the techniques which are used to summarise and process the data collected for deriving useful and relevant information for decision making. The information processing tools are determination of network diagram and critical path, Action plan and Gantt Chart, use of MS excel and spread sheet for calculating financial viability of project (Gruenwald, 2013). Management information System for generation of management reports etc.

The following is the project plan for the development and launching of proposed tour product based on the results and findings of the research conducted into this matter:

Network Diagram

Critical Path

It is the path on the network diagram of the project having the longest duration to complete the activities included in the path or the path on which all the activities included have a zero float. The activities included on the critical path are known as critical activities which cannot be delayed in the rescheduling of the duration of the project. The critical path of the development and launch of new proposed tour product can be determined as follows:

Possible paths on the network diagram:

A-B-D-F-G-H = 35 days

A-B-E-H = 23 days

A-D-E-H = 23 days

Critical Path = Longest path = A-B-D-F-G-H = 35 days

B Using financial tools such as feasibility analysis to assess viability of project

Financial tools are the methods which are used for the financial analysis. This includes feasibility analysis to assess the viability of a financial project. The project of the development and launch of new tour product will involve financial income and expenditure during the life of the project. The feasibility analysis of the project in terms of financial tools such as Net Present Value analysis and Internal Rate of Return (IRR) can be conducted as follows:

From the above calculation of NPV and IRR, it can be observed that the NPV of the project is positive which earns that the project will be able to generate profits from the tour products in the form of cash inflows for the period of 5 years. Aldo the IRR of the project is higher than its cost of capital of 10% which means that it will earn good returns. Thus the project is financially viable (Bas, 2013).

Conclusion

From the analysis and evaluation of the results of the findings of the survey about the customer preferences in relation to proposed new tour product, it can be concluded that the project is feasible and financially viable in terms of profits from the new tour product. Also it can be concluded that the result and findings of the survey are appropriate and relevant to support the decision making process with regards to the tour operators business in context of developing a new tour product.

References

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Gruenwald, H. 2013, "Logistics Software from a Logistics Management and Management Information Systems (MIS) Perspective", Information Management and Business Review, vol. 5, no. 12, pp. 591.
Habib, M.,Pathik, B.B. & Maryam, H. 2014, Research methodology - contemporary practices: guidelines for academic researchers, 1stedn, Cambridge Scholars Publishing, Newcastle upon Tyne, UK
Manikandan, S. 2011, "Measures of central tendency: Median and mode", Journal of pharmacology & pharmacotherapeutics, vol. 2, no. 3, pp. 214-215.
Olsen, W. 2012;2011;, Data collection: key debates and methods in social research, SAGE Publications, Thousand Oaks, CA.
Roepstorff, C., Petersen, H. & Berthelsen, A. 2015, "Optimizing Data Collection", Biology of Blood and Marrow Transplantation, vol. 21, no. 2, pp. S265.
Sireesha, V. & Shankar, N.R. 2010, "A New Approach to find Total Float time and Critical Path in a fuzzy Project Network", International Journal of Engineering Science and Technology, vol. 2, no. 4, pp. 600-609.
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Webber, H., Nelson, S.J., Weatherbee, R., Zoellick, B. & Schauffler, M. 2014, "The Graph Choice Chart", The Science Teacher, vol. 81, no. 8, pp. 37.
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