# Unit 6 Business Decision Making Assignment - Statistical Method

### Unit 6 Business Decision Making Assignment - Statistical Method

 Program Diploma in Business Unit Number and Title Unit 6 Business Decision Making QFC Level Level 5

## Introduction

Business decision making is the process making imperative decisions in order to make a good profit in this financial market. Different aspects such as mean mode medium are used in order to get the best understanding with different related sources.  In this report we have shown the different various needs of the data in order to understand the consumer behaviour and their respective response in the market. A business man needs to analyses several market aspects in the best and efficient manner. Statistical calculation and other measures are considered to be very important in the business life cycle such as risk management in the business organization helps management to come up with potential business decision in the long run. The main study of use of mean, mode, medium in the use of business decision making process and how standard deviation and other confident of variance have proved to very much use in the business decision making at large in the BDM system of the organization. Sometime company has to use these measures to anticipate the project cost and vulnerability simultaneously identifying the risk associated with the project.

#### Task 1.1 Create a plan for the collection of primary and secondary data for a given business problem?

Office furniture in U.K. is the biggest stylish seller of office furniture and office desks and chairs on the big level and it is also seen that company has shown a big turnover in the office market segment. Now in the given scenario company wants to make investment in the home furniture sector in order to extend the market share. Office furniture now in order to understand the consumer’s market behaviour and their choice of action with the given options are making a research program so that best result could be derived with the implantation of this strategy at big level (Roepstorff, et. Al, 2015).

Plan for gathering primary and secondary data has been shown as below.

Data collection plan- Data collection plan is to created by office furniture as per the resources and information need in different working with people process system.  It is consisted with the several stages of the data collection process. There is various data collection process e.g. primary data collection, secondary data collection. In order to grab the information company could use internal sources such as data generated through administrative department, as well external sources such as magazines, official gazettes, industry survey. Sample size and sampling method could be the best suitable sources to gather data. Eventually company would make the data mining from the collected data at large.

• Step 1 - For this task management of the company should identify the real crux behind collection of primary and secondary data and then design the survey methodology.
• Step 2 - Afterward management has to involve collection of data with the complete analysis.
• Step 3 - Office furniture needs to firstly identify the need of the information as per the developed plan and then further data collection methodology could be used accordingly.
• Step 4 - It could grab this all information with the help of given sources that are divided into following parts

The qualitative data can be extorted from several methodologies such as using official gazette, magazines and other collected data at large (Tzemanaki, et. At., 2014). With the help of this office furniture could be able to encourage for making their own judgement and perception for several offers in selling office furniture and other goods at large.

Primary data collection sources- It is seen that Office furniture  in order to get the best result with the given business strategy of making investment in new market has to collect the information of market, consumers behaviour, rivals threats, quality of the products offered in the market and further more. This data could be collected with several sources such a personal interaction with the large amount of consumers, by observing different market behaviour , interview and experience of the persons in the market with the given product in the market.

Secondary data collection- Office furniture is making investment in the unforeseen market segment and in order to avoid many costly mistakes and hurdles company has collected data from market with the different given sources e.g. taking grasp of trend of the home consumers,  report of different market intelligence, newspaper, journals, books and reports shown in the government data collection hub.

• This collection of data at large has provided a very good help to office furniture in order to make a good business decision making in following ways.
• Helps in avoiding costly mistakes in business decisions.
• Proper vision and preparation of mission could be made with the collection of data at large.
• Provide a good assistance in producing goods and services so that products offered in market. Could show high level of threats to the exiting competitors.
• Study upon the past mistakes and drawbacks of other rivals could be proved to be much of helps, to company in order to come up with the strong business decision strategy.
• This study will also help in development of good plan in the home furniture market and better understanding upon the market behaviour and consistent changes as whole.

Approach and stages to collect the data in the market research- Company has defined set of program that helps in gathering information indifferent and effective manner e.g. making data collection plans and policies,  then company ask for expert advice in order to make changes in the methods afterward implantation of framed plan is done now company has to evaluate the effectiveness of the data collection process this is the round process and it is performed until or unless company gets the full information.

Committee involved in data collection- Office furniture has appointed a different and independent committee that will have proper supervision upon the work of collecting data from different sources. Mostly it is involved in the collection of data with the help of seminars interview and random data collection from people walking on road.

#### Task 1.2 Present the survey methodology and sampling frame used?

Survey methodology- This is the research method of collecting data for the good decision making process. This method is used by different team members and for the collection of good amount of information from the market. In this survey methodology user takes various questionnaire and survey tools in order to gain a better understanding of the market. Mostly questionnaire is comprised of collection of qualitative data. Quantitative data is grabbed with the help of observation and other secondary sources of data collection process. Survey methodology is comprised of two different collection of data either sample survey or public survey.

In sample surveys only part of the people is chosen as a representative people e.g. first row of the student sitting in the class

• Sample survey- Office furniture used this technique in order to come up with the appropriate interest and behaviour of people belonging to small area. But there is also found the fact that sample survey is also used to grab the human behaviour for particular goods and services offered in the market.
• Simple sample random collection survey- this is the data collection tool which helps in grasping a core data of the selected purpose and also provide a better understanding with the random collection of data. For the collection of this type of data user makes no plan sudden happing, and process functions of doing work provides office Furniture Company this type of data.
• Stratified sample survey- This kind of sample survey provides the segmented data of different age group of people. Office Furniture Company could make a good use of this data technique in order to understand the different need of Children, newly married couple, old citizen’s choice of action and further more.
• Cluster sample survey- This sample is collection can be acquire by dividing into a few groups and single level of population is used to gather required information.

Sample survey plays a very critical task in developing an effective data collection process. Office furniture being in tough competition with its rival in furniture offering segment has to use We will be choosing Stratified sample survey. Stratified sample survey is the most suitable method which could be adapted by the management department for the betterment of goods as per the choice of the current market. Office furniture has to develop its goods as per the demand and need of different corporate sectors. It helps office furniture to develop furniture’s of different price group. If the gathered information with the help of sample survey is valuable or beneficial for the office furniture functioning then information collected is analysis by the top management for the better decision making in the long run. Office furniture could use the information collected with the help of stratified sample survey for developing different customised products for the several potential clients.

#### Task 1.3 Develop a questionnaire for this research and justify its design?

Questionnaire- This is the data collection page which is comprised of different variety of questions in large and provide a better understanding to the users in several decisions. Mostly this tool is used so that consumers’ preference, taste, behaviour and choice of action could be understood in better and identified manner.  Questionnaire is coupled with the following questions as below-

1. What is your age block?

• 0 – 30 years
• 31 – 40 years
• 41 – 50 years
• More than 50 years

•  Male
•  female
• Children
• Old Citizen

3. Have you ever purchased of products in your office premises?

• Yes
• No

4. Have you ever heard about our company and its services in the market?

• Yes
• No

5. What are the key points you think we have best in our value chain activities?

• Services offered
• Attractive offers
• After sale services
• Durability of products

6. How do rate our research and development department in the present time era?

• Good
• Effective
• Normal
• Not effective

7. What will be your opinion upon our decision to enter into offering home furniture market segment?

8. What will be your suggestion for our new products and services?

9. What will be your comment for our staff members and services offered to you?

10. What would you like to purchase in our store mostly

• Sofa set
• Table set
• Dining table
• Curtains and flower standing tables

11. How would you like to place your order for the products and services we offered in market?

• Online
• Walk in the store
• Through some agency
• At home services

12. What will be your useful comment for the betterment of our product services offered in the Market?

13. How do you rate our company’s product and our Valuable Study Material effectiveness in the real time manner?

14. What is the best suitable option for the company to connect with the clients?

• Through mail ID
• Seminars
• Door to door visits
• Calling of phone

15. What are the best suitable courses of action you like in the company selling procedure?

• Online
• Offline
• Through retail stores
• Through variable means

16. Do you like the discounts and coupon offered given by the company?

• Agree
• Disagree
• Neutral
• High NO

17. Do you find our products being an affordable to buy?

• Yes
• No

#### Task 2.1 Summaries the data above using representative values (Mean, Median, and Mode) and analyse the results to produce information for decision making?

In this research program we have been given a standard data and now we could use different methods or statically tool in order to make a rational business decision making in the selling furniture in the home comprised set of segments.

Office furniture has various records of 12 month office furniture sale which are given in the below table.

 MONTHS DESKS ( MILLION £ CHAIRS ( MILLION £ JANUARY 145 215 FEBRUARY 154 325 MARCH 179 185 APRIL 192 332 MAY 215 406 JUNE 219 522 JULY 244 412 AUGUST 251 614 SEPTEMBER 204 544 OCTOBER 181 421 NOVEMBER 152 395 DECEMBER 105 255

With the help of data given we have calculated different level of mean, mode median for the office furniture limited so that company could make a good forecasting with the demand of the home consumers in the market and supplying the estimating required products with a view to fill the market.

 Particular Data Data Mean 186.75 385.5 Median 186.5 400.5 Mode #N/A #N/A

Mean- it is the statistical data derived value which is used to denote the average of the given data. This could help office furniture to derive a good business decision on the basis of average past selling turnover of the office desks and office chairs. Office furniture has used all the data calculated with the last 12 month sale and has come up with the decision making that during the last 12 month company has made average sale of office Desk 186.75 and sell of office chair is 385.5. This has allowed office furniture to understand the actual need of the market and potential demand of the given products (Weber, 2014).

Conclusion: Mean is the average value of the entire outcome given. As per our calculation mean of the company in selling desk is 186.75 and in chair same increased to 385.5. This type of data divulges that company should be making more focus on selling chair in the market to earn more profit..

Mode- It is the value that shows the highest frequency of the sold products in the market. But In this present scenario only office chairs and office desk sold in the market are given their repeating level of frequency is not shown. Therefore it could be said that office furniture ltd will not be able to take the benefit of the mode in its business decision making.

Conclusion: Mode of the company depicts the highest frequency of the data. But as per the data collected in this business report we are unable to find MODE value of the company.

Median- it shows the mid value of the data given. This statically data given is used to understand the actual mid value of the sold products in the market. Office furniture has been selling office furniture and office desk throughout the long time... Now company wants to diversify its business in the same production channel with the development of products in the different market segment. Therefore company has to make proper investment with the expected results (Sugaya & Furuya, 2011).

Conclusion: Company has to evaluate the computed mean in both the products e.g.-office chair 186.4 and in case of selling office desk median age 400.5.  With the help of both data it could be said that company is earning more with the selling of office desk in the market. Company should be focusing on sale of office chairs for earning more profit in the market.

#### 2.2 Use of information collected to draw conclusions in a business context

 Particular Data Data Mean 186.75 385.5 Median 186.5 400.5 Mode #N/A #N/A

With the help collected information it is observed hat company has consumers in the market are paying average £ 186.75 for buying chairs and for buying desk average amount of £ 385.5 is being paid. Therefore company should set its chair and desk price around at £ 186.75 and £ 385.5 respectively for increasing its sales planning and maximising profit at large. This affordable price setting with a view to provide clients to buy more product will not only helps in increment in turnover but it will as well be the creation of effective strategic plan to beat the competition in market.

#### Task 2.3 Analyse the data using tools for measures of dispersion (Range, Inter-quartile range, and Standard Deviation) to derive information for Office Furniture?

 Range 146 429 Quartile 1 153.5 307.5 Quartile 3 216 446.25 Standard Deviation 43.0309 131.862

Range- it is the differentia on or gap between the two limits usually known with the upper limit and lower limit on some particular scale or chart. In this given project we have calculated different range which depicts the actual difference between the smallest sale and largest sale of the given both products in the market. Usually this difference arises due to the change in the seasons and economical purchasing power of the consumer at large.

Formula =Cell containing Max value- cell containing Min value

Quartile-1 It is the useful concept which is used to describe the accurate mid value of the given data. Its calculation is similar to the median. The first quartile shows the data at the point of 25th percentile. This helps office furniture to understand the mid value of the 12 month selling of the two products named office desk and office chair. There has been made the actual computation of the both products.

Quartile-3 Office furniture has computed quartile 3 of the both the products which are 216 for the office chairs and 446.25 is for office desk selling in the market.  Both the mid value is computed at the point of 75th percentile of the data given in the scenario.

Standard deviation- Standard deviation is the process of calculating the risk of the given project in this given scenario  office furniture has calculated standard deviation of both the products named office chair-43.03 and office desk 131.86. Office furniture ltd uses this standard deviation in order to apply annual rate of return of investment to measure the vulnerability of identified project. This deviation also helps in measuring the key fundamental risk of the given projects in the business line (Troiano, 2015).

Formula =STDVA (Data range).

#### Task 2.4 Explain how quartiles, percentiles and the correlation coefficient can be used to draw useful conclusions for Office Furniture?

Quartiles- it is used to find out the mid value of two limits given in the data projects. Office furniture uses this data calculation with a view to come up with the middle value between two quarters of a distribution. In this scenario lower quartiles is the middle value of first and second quarter given and upper limit is comprised of third and fourth quarter selling turnover of the products in the market.

Percentile- It is the value which is calculated with the help of converting data into percentage. It is coupled with the step of dividing given data with the 100. Let’s just understand this with the given example that 20 % will fall into the 20percetile and 40% will fall into 40percentile.

Coefficient of variance- It is used to come up with the project vulnerability in the long run. This measure the actual risk and outcome of the project adopted. If calculated coefficient of variance is less that 1 the company has to opt another project. It is viable to stick with the project plan which depicts at least 1 coefficient of variance

For the calculation of Coefficient of variance management needs to first calculate the mean of two products after then needs to subtract each and every value in the circulation subtract. Then there is need to make square the results got. In the end calculation is made to identify the average of these differences (Gao & Gao, 2014)

 Particular Chair X/ X- X Value JANUARY 145 186.75 -41.75 1743.06 FEBRUARY 154 186.75 -32.75 1072.56 MARCH 179 186.75 -7.75 60.0625 APRIL 192 186.75 5.25 27.5625 MAY 215 186.75 28.25 798.063 JUNE 219 186.75 32.25 1040.06 JULY 244 186.75 57.25 3277.56 AUGUST 251 186.75 64.25 4128.06 SEPTEMBER 204 186.75 17.25 297.563 OCTOBER 181 186.75 -5.75 33.0625 NOVEMBER 152 186.75 -34.75 1207.56 DECEMBER 105 186.75 -81.75 6683.06 Sum 20368.3

Mean= 186.75

Coefficient of correlation of chair = 20368.3/12-1 = 1851.659

In case of desk

 JANUARY 215 186.75 28.25 798.062 FEBRUARY 325 186.75 138.25 19113.1 MARCH 185 186.75 -1.75 3.0625 APRIL 332 186.75 145.25 21097.6 MAY 406 186.75 219.25 48070.6 JUNE 522 186.75 335.25 112393 JULY 412 186.75 225.25 50737.6 AUGUST 614 186.75 427.25 182543 SEPTEMBER 544 186.75 357.25 127628 OCTOBER 421 186.75 234.25 54873.1 NOVEMBER 395 186.75 208.25 43368.1 DECEMBER 255 186.75 68.25 4658.06 Sum 665821

Coefficient of correlation 0f desk= 66581.3/11= 60529.2

This information calculated by the office furniture for two products helps in developing effective strategies and will provide the cleat interpretation over the risk taking and return gaining strategies in determined manner. In addition to this coefficient of correlation of both products will depict the real outcome of the company’s performance in determined manner. Different calculation of quartiles, percentile, and standard deviation has been made by the office furniture in order to come up with the effective plan. Quartiles, decline and percentile show the mid value of the total turnover of the both products. Whereas standard deviation will depicts the highest level of risk that could be taken up by the office furniture ltd in the new project line.

How quartile, percentile, correlation of co efficient can be used to draw an effective conclusion -

This measurement is useful to be able to see the area where the most numbers in a dataset full. This would b useful for determining sales team if for instance needed to allocate a total bonus  to employees then we would be able to conclude regard with who will be able get how much. On the other hand with the help of coefficient of correlation we would be able to determine eh project vulnerability as per the risk involved in the same. By summarising the calculated data we could draw an effective conclusion in all the fields such as risk involved, project vulnerability, effectiveness and etc.

Project plan- This is the plan of newly think project in which office furniture would be making initial investment in order to grab the Home segment furniture market share. Company has understood the sophisticated need of different consumer’s demand of well-furnished home. Company has prepared a good project plan showing the each and single time involved in the preparation of several activities and its importance by showing the actual ranking. This given project plans also cover the starting and ending time of the particular activities involved in the data collection process of office Furniture Company (Simmons, et. At, 2011).

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#### Task 3.1 With the aid of a spread sheet present your information on pie charts, line graphs, and bar graphs as appropriate and draw your conclusions to aid decision making for the diversification strategy?

This graph shows that company is having good sell of sofa in all of the years on consistent basis. In addition to this selling of dining tables have low selling throughout the time. Beds are sold in the market also tremendously increasing during the years. But in case of wardrobes office furniture has low sales. Therefore company should focus on strategic plan for increment in the sales of wardrobes at large. This graph shows that company is having good sell of sofa in all of the years on consistent basis. In addition to this selling of dining tables have low selling throughout the time. Beds are sold in the market also tremendously increasing during the years. But in case of wardrobes office furniture has low sales. Therefore company should focus on strategic plan for increment in the sales of wardrobes at large.

It divulges the effective view points of the company throughout the time. In this trend line we will be using several years’ data of selling products and judge the capacity of the product selling of sofa sets, office chairs and further more.

 2009 2010 2011 2012 Beds 4 5 5.5 5.5 Sofa 6 6.3 6.9 7.2 Wardrobes 2 2.1 2.3 3.3 Dining Table 3 3.5 2.5 2.3

#### Task 4.1 Use information processing tools to manage inventory effectively?

Management information system is the process of developing a system in the process working cycle so that it could be useful for employees to pull the queries in order to troubleshoot problems related to information. It is also called integrated system in which various types of data collected for the management.  In order to keep the management information tool efficient company has to use proper high graded technology system and high quality of staffs so that they can handle work in best manner.

Office furniture could use this information for the betterment of its inventory management system. With the view to pace with the increasing competition of the market there is need to make effective development of new technology and enterprise resources planning in company’s all process system. Therefore by adopting MIS office furniture could make automation in its several processes. This process gradually results into cost saving and less possibility of mistakes in value chain activities.

COGNOS is the best suitable example of management knowledge and information system which could help office furniture as per the needs and demand of the process system. There is other several MIS could be seen such as Management information system is also used in organization to reduce the paper work and minimize the possible mistakes in handling data. It is computer base system which mange and makes data mining of all the required data for the betterment of the company. MIS is equal to Enterprise resources system which is used in order to increase the transparency in the working system and reduce the work load of employees in performing tasks. In addition to this MIS has been implemented in order to manage inventory effectively in several parts of the organization.

Using of MIS helps company in following activities:

Using of MIS will help office furniture to develop automation in its working system and company could place orders with its suppliers and vendors without passing any authority and other clearing check. In addition to this MIS system make checks of stocks on its own therefore using of MIS will results into saving of time and cost at large. It is also could be used as enterprise resources planning for the better and effective management of the company’s working system.

It helps company in the following ways

• It provides up-to-date data at all the time
• Accuracy and quality of data could be seen with the given data.
• Computer and high tech are used in order to help company in each and every kind of activities
• It helps in production support and budget inventory system.
• It helps in making a good activity plan (Semmes, 2010).
 Steps Particulars Performing days Maximum time to be taken to complete the activities Priority to perform task A. Forming data collection plan and policies 30days 35 days A B. Compliance with all the legal requirement 20 days 30 days B C. Prepare a draft of business activities 20 days 30 days J D. Arrangement of fund and money for the chosen project 30 days 40 days E E. Issuing share and scriptures to share holders 20 days 2 days C F. Website development of holding a newly organized portal for the home furniture 40 days 45 days D G. Alliance with franchisees and other agency to sell the products in the market. 40 days 40 days I H. Establishment of a good team 30 days 35 days G I. Cross check of available sources 10 days 10 days H J. Training to provide new tactics  and development of staff members 10 days 15 days K K. Implement the business plan 15 days 20 days D

#### Task 4.2 Using a network diagram, prepare a project plan on how you are going to implement the above system for Office Furniture and determine the critical path?

Critical path- It is the best available choice of action in opting out of the given projects. Office furniture chooses the best project plan in order to provide the best services in the market. Critical path shows that how much least time would be involved in doing certain business plan in this complex business environment. Critical path helps office furniture Ltd to opt a best business plan with less time consuming process. This path could be analysed with the given project lines available plan for the company.

Networking diagrams- This path shows the vulnerability of the best path chosen by the organization for the time being in force. It helps company to opt the best project plan that could be used to generate more inflow in the company working system (Li, et. Al, 2015).

Critical path for office furniture - A-D-H-I-J-k (5+5+5+3+1+1) =20 days

Computation of float chat:

Company can implement this project by using the lowest critical path as this will provide the best time effective path to install the new system in the business life cycle. Company can implement this system by arranging funds and appointing a new project manager who will take care of all the related activities of the relevant project. Process required to implement the new project will comprised of several set of activities such as identifying the need of different process system need, arranging the funds and appointment of new staffs and employees, install computer links and appointment of project manager who will be responsible for all the activities related to install new MIS in organization working system.

#### Task 4.3 Using the investment appraisal tools of NPV & IRR, you are required to propose the better MIS investment alternative to Office Furniture clearly justifying your proposed choice?

 Year Supplier A (£’000) Supplier B (£’000) Cash flows 2013 -1000 -1500 2014 300 400 2015 350 425 2016 400 450 2017 425 475 2018 450 500 NPV \$619.95 \$416.87 IRR 25% 15%

Recommendation- In this given scenario cash flow of supplier A is more than supplier B then company has to go with the project offered by supplier A. net present value is the actual depiction of the value driven by the vulnerable projects and it also consider simultaneously time value of money(Robison, et., Al, 2015) Internal rate of return is considered to be high in supplier A that is 25% and in case of supplier B internal rate of return is 15%. It shows the actual cost of capital required by the businessman in the initial investment. There is with the given data it could be find that for the better management of data there is need to Install MIS from supplier A who is giving 25 % IRR and its net present value is also very much effective \$619.95. Therefore office furniture should install MIS from Supplier A There company has to evaluate a backup plan of IRR in order to meet with the market contingent inflation and economy sacristy of the resources in the present era.

Better MIS system-

• Present MIS system is not that efficient company needs to have system which could identify various cross checking of the information (Tarquini & Favalli, 2010)
• Company needs to develop a secure management information system in order to increase the creditability of the MIS system.
• Automation in the data collection should be increased to build a better functioning channel in MIS system.
• Sophisticated technology with the up-to-date gadget has to be maintained in better way to develop a good monitor channel in order to evaluate the performance of the employees(Shu, et, Al., 2015)

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#### Conclusion

This report has shown the best understanding of the data management and different level of survey program in the business decision. I have measured the several aspects of the data collection methodology so that a better understanding could be developed on the consumers’ preference and developing choice of action. Primary and secondary are the two important sources of data collection technique that is used in this project to showcase the various needs and tool of the data collection process.

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