Business Decision Making

Table of Contents
Task 1........................................................................................................................... 2
1.1.

Prepare a plan for the collection of primary and secondary data for the given scenario..............2

Data collection plan.......................................................................................................... 2

Opening of new outlet of gastronomical ice-cream....................................................................2
1.1.1.

Information required to take decision regarding new outlet..........................................2

Primary information................................................................................................... 2
Secondary information................................................................................................ 2
1.1.2.

The methods to collect data for required information.................................................2

Source of primary information...................................................................................... 2

Sources of secondary information..................................................................................3
1.2.
Describe your population where samples have been collected from and justify the use of the same.
Was the sampling size appropriate for your research topic, explain. Describe and justify your sampling
method. Identify the possible sources of bias or error that could occur when sampling........................3
1.3.

Design a sample questionnaire and explaining what data is to be collected for the given scenario.3

The requirements of data collection................................................................................... 3

Questionnaire................................................................................................................. 4
Task 2........................................................................................................................... 7
United Bank................................................................................................................... 7
Report for service development for students.........................................................................7
2.1. Students five years balance ()................................................................................... 7
2.1.1. Pie graph............................................................................................................ 8
2.1.2. Bar graph............................................................................................................ 8
2.1.3. Time series chart................................................................................................... 9
2.2. Data on Age of the Students and their Average Balance for the previous year of 2012................9
2.2.1. Pie graph.......................................................................................................... 10
2.2.2. Bar graph.......................................................................................................... 10
2.2.3. Time series chart................................................................................................. 11
2.2. Tally the data shown in Table 3 into a frequency distribution using 100 as a class interval and 0 as
the starting point. Draw a histogram and a frequency polygon to present the above data....................11
2.2.1. Histogram......................................................................................................... 12
Frequency Polygon..................................................................................................... 12
2

2.3. The bank considers any student with an ending balance of 400 or more a preferred customer.
Estimate the percentage of preferred customers......................................................................12
2.4. The bank is also considering a service charge to the lowest 10 percent of the ending balances. What
would you recommend as the cut-off point between those who have to pay a service charge and those who
do not? Produce a formal report for the same.........................................................................13
Task 3......................................................................................................................... 13
3.1. Mean................................................................................................................. 13
3.2. Median............................................................................................................... 13
First Quartile.......................................................................................................... 14
Third Quartile......................................................................................................... 14
3.3. The five number summary....................................................................................... 14
3.4. Standard Deviation, Variance, Coefficient of variation........................................................14
Variance................................................................................................................ 15
Standard Deviation.................................................................................................. 15
Coefficient of variation............................................................................................. 15
Skewness.............................................................................................................. 16
Maximum waiting hours............................................................................................ 16
Task 4......................................................................................................................... 16
4.1. Scatter plot.......................................................................................................... 16
4.2. Correlation.......................................................................................................... 16
Task 5....................................................................................................................... 19
Project Plan............................................................................................................... 19
Cookie Baking Project............................................................................................... 19
Resources of project.............................................................................................. 19
Time...................................................................................................................... 19
CPM....................................................................................................................... 19
Critical Path........................................................................................................... 20

Task 1
1.1.

Prepare a plan for the collection of primary and secondary data for the given
scenario.

Data collection plan

Opening of new outlet of gastronomical ice-cream

1.1.1.

Information required to take decision regarding new outlet

Information serves as the base for accurate decision making, In order to select location for new
store, primary as well as secondary information is required in order to decide upon opening new
outlet for gastronomic ice cream.
Primary information
Consumers perceptions regarding the location in terms of convenience and proximity
Secondary information

Finances of company
Demographics of consumers
Prices of location
Population of target consumers in the potential area
Availability of location
Information regarding the proximity of new location with main city
Presence of competitors
Sales data in different regions

1.1.2. The methods to collect data for required information

Source of primary information
In order to decide for the best place for opening new outlet, data will be gathered by closed
ended questionnaire and consumer panel.

100 questionnaires will be distributed to the

consumers visiting the shop. 15 loyal consumers will be requested to participate in discussion
regarding their preference for opening new outlet.
4

Sources of secondary information

The internal data base will be used in order to collect data regarding companys sales and
revenues. This will give an insight into the trends of sales, revenues and profit that company is
earning so that budget can be allocated in order to buy new building. Moreover external sources
will be used i.e., internet search, online data bases, and market research data will be used. This
will give information regarding the paces vacant and available to open new outlet, how much
competitors are located in that area, what is the consumer walk in rate, population , average
sales in the potential area, demographical information etc.

1.2.

Describe your population where samples have been collected from and justify the
use of the same. Was the sampling size appropriate for your research topic, explain.
Describe and justify your sampling method. Identify the possible sources of bias or
error that could occur when sampling.

The main aim of data collection was to decide on optimal location for new ice cream store, in
this regard most suitable population is the target consumers of gastronomic ice-cream. The
consumer data base was selected to randomly choose the participants. This is an appropriate
sampling method as it allows the selection of participants with equal chance of being selected.
Furthermore, this method offers better generalizability of results along with being un-biased
(Creswell, 2013). 500 questionnaires were deemed to be appropriate for distribution of
questionnaires because the population comprised of 5000 consumers (). Although, the simple
random sampling method has various advantages yet it puts limit on the representation of data
and the variation in population can become inherent.

1.3.

Design a sample questionnaire and explaining what data is to be collected for the
given scenario

The requirements of data collection

In order to obtain data regarding consumers preferences for new ice-cream out let the
information regarding the choice of place pertaining convenience, accessibility, hanging out
preferences and space will be collected. Furthermore, the demographic data of consumers will
also be needed to judge the location of most of consumers, age, income level, profession and
5

status. The following questionnaire is developed in order to obtain the required information in
effective manner. It was ensured that all questions are relevant and close ended.

Questionnaire
Dear participant,
We aim to open new outlet for gastronomic ice-cream for this purpose we are conducting this
survey to know your preferences. The responses will be kept anonymous and used only for the
purpose of research. Kindly mark the most appropriate option.
Demographics
Gender
o Male
o Female
Age
o
o
o
o
o
o
o
o

Below 15
15-20
20-25
25-30
30-35
35-45
45-50
Above 50

Status
o Upper class
o Middle class
o Lower class
Income level per month
o
o
o
o

Below 1000
1000-3000
3000-5000
5000-7000
6

o Above 7000
Marital status
o Single
o Married
Profession
o
o
o
o

Self-employed
Business man
Jobholder
Student

Survey questions
1. I like spacious ice cream parlors
Strongly agree

agree

Somewhat agree

neutral

Strongly disagree

2. I visit those ice-cream shops that are near to my house

Strongly agree

agree

Somewhat agree

neutral

Strongly disagree

neutral

Strongly disagree

3. I prefer ice-cream shops in a shopping mall

Strongly agree

agree

Somewhat agree

4. I visits the ice cream shops that are located in main city area
Strongly agree

agree

Somewhat agree

neutral

Strongly disagree

neutral

Strongly disagree

5. I feel that present ice cream out-let is over crowded

Strongly agree

agree

Somewhat agree

6. I will visit new outlet of gastronomic ice-cream

7

Strongly agree

agree

Somewhat agree

neutral

Strongly disagree

7. I feel that gastronomic ice-cream should open new outlets

Strongly agree

agree

Somewhat agree

neutral

Strongly disagree

8. The present outlet of gastronomic ice cream is not easily accessible.

Strongly agree

agree

Somewhat agree

neutral

Strongly disagree

9. I feel that the present outlet of gastronomic ice-cream is old

Strongly agree

agree

Somewhat agree

neutral

Strongly disagree

10. I visit ice-cream shop

Alone

With friends

With family

With colleagues

11. I visit ice-cream outlet

daily

Weekly

Twice a week

12. I always buy from gastronomic ice-cream

Yes

No

Thank you!

Monthly

Twice a month

Task 2

United Bank
Report for service development for students
2.1. Students five years balance ()
Table 1
Five years balance ()
Years
2008
2009
2010
2011
2012

Balance
350
180
93
120
210

2.1.1. Pie graph

Balance for 5 years

2008
2009

22%

2010

37%

2011
13%
10%

2012
19%

The data reveals that maximum balance was in 2008 (37%), followed by 2012(22%), 2009
(19%), 2011(12%) and minimum balance was in 2010 (10%).
9

2.1.2. Bar graph

Balance for 5 years

2012
210

2011
2010
2009
2008
0

50

100

150

200

250

300

350

Axis Title

The data shown in bar graph reveals that maximum balance was in 2008, followed by 2012,
2009, 2011 and minimum balance was in 2010.

2.1.3. Time series chart

Balance for 5 years

400
350
300
250
200
150
100
50
0
2008

2009

2010

2011

10

2012

The trend line shows that balance declined till 2010 and then the balance again showed
increasing trend.
2.2. Data on Age of the Students and their Average Balance for the previous year of 2012
Table 2
Balance and age of students for 2012
Balance
108
370
430
605
1100

Age
12 to 14
15 to 17
18 to 20
21 to 23
24 to 27

2.2.1. Pie graph

The pie graph reveal that with age, the balance is increased such that students from age group 1214 have balance of 108 (4%), 15-17 years have balance of 370 (14%), 18-120 has more
balance that is 430 (17%), 21-30 has balance of 605 (23%) and 24-27 have balance of 1100
(42%).

11

2.2.2. Bar graph

Similar trend is revealed by bar graph that shows students from age group 12-14 have balance of
108, 15-17 years have balance of 370 , 18-120 has more balance that is 430, 21-30 has
balance of 605 and 24-27 have balance of 1100 .

2.2.3. Time series chart

It is clearly indicated by upward moving trend line that the balance increases with age.

12

2.2. Tally the data shown in Table 3 into a frequency distribution using 100 as a class
interval and 0 as the starting point. Draw a histogram and a frequency polygon to present
the above data.
X
0-100
100-200
200-300
300-400
400-500
500-600
600-700
700-800
800-900
900-1000

Talley
IIIIIIII
IIIII
IIIII
IIIII
IIII
II
I
IIII
I
I

Frequency
9
6
6
6
4
2
1
4
1
1

2.2.1. Histogram

Histogram
10
8
6
Axis Title

4
2
0

Axis Title

13

Frequency Polygon
10
9
8
7
6
5
4
3
2
1
0

2.3. The bank considers any student with an ending balance of 400 or more a preferred
customer. Estimate the percentage of preferred customers.
Percentage of preferred consumers= (4+2+1+4+1+1 = 13) = (13/40) x 100 = 32.5

2.4. The bank is also considering a service charge to the lowest 10 percent of the ending
balances. What would you recommend as the cut-off point between those who have to pay a
service charge and those who do not? Produce a formal report for the same.
Total people= 40
Those who will pay service charges= 0. 10 x 40 = 4 people

First lowest - 27
Second lowest - 37
Third lowest - 43
Fourth lowest - 55
Fifth lowest 57

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Task 3
3.1. Mean
Mean = X/n
= 5.55 + 3.02 + 5.13 + 4.77+ 2.34+ 3.54+ 3.79 +4.50 +6.10 + 0.38 +5.12 +6.46 + 6.19 / 15
=4.3
3.2. Median
First of all the data is arranged in ascending order, for odd number of observations the mid value
is median that is 4.77
0.38
2.34
3.02
3.54
3.79
4.5
4.77
5.12
5.13
5.55
6.1
6.19
6.46

Median

First Quartile
Q1= (n+1)/4th item
=14/4
= 3.5=4 =3.54
Third Quartile
Q3= (n+1) th item
=42/4th item=10.5=11=6.1

15

3.3. The five number summary

Minimum
Median
First quartile
median
Third Quartile
Maximum

0.38
4.77
3.54
3.77
6.1
6.46

The summary reveals that average waiting time in lunch hours is 3.7 minutes, with minimum
time of 0.38 seconds and maximum time of 6.46 seconds. This implies that bank should reduce
the waiting time to the minimum value in order to enhance the delivery of services.

3.4. Standard Deviation, Variance, Coefficient of variation

Total

X
0.38
2.34
3.02
3.54
3.79
4.5
4.77
5.12
5.13
5.55
6.1
6.19
6.46
56.89

(x-)2
15.3664
3.8416
1.6384
0.5776
0.6561
0.04
0.2209
0.6724
0.6889
1.5625
3.4225
3.5721
4.6656
36.925

x-
-3.92
-1.96
-1.28
-0.76
-0.81
0.2
0.47
0.82
0.83
1.25
1.85
1.89
2.16
0.74

Variance
2 = (x ) 2 /n
=36.925/13
=2.8

16

Standard Deviation
= variance
SD= 01.67
Coefficient of variation
CV= CV/Mean
=1.67/4.3
=0.38
Skewness
The data is skewed because the mean, median and mode is not equal that shows that data is
asymmetrical. In this case, the data is not distributed normally while kurtosis can be used to
measure it.
Maximum waiting hours
In this case the maximum waiting time is 6.46 minutes and the statement of manager that the
maximum time of wait in lunch hour is less than five minutes is not true regarding the given
data.

17

Task 4
4.1. Scatter plot
18
16
14
12
10
Axis Title

8
6

Linear ()

4
2
0
45

50

55

60

65

70

Axis Title

The scatter graph shows that there is moderate positive correlation in sales and distribution
expenses as the dots are close but not exactly fitted.
4.2. Correlation
Month

sales

selling and distribution (Y)

XY

x2

y2

Jan
Feb.
march
April
may
June
July
August
Septembe

(x)
50
50
55
60
62
65
68
60
60

11
13
14
16
16
15
15
14
13

550
650
770
960
992
975
1020
840
780

2500
2500
3025
3600
3844
4225
4624
3600
3600

121
169
196
256
256
225
225
196
169

r
October
Total

50
580

13
140

650
8187

2500
34018

169
1982

18

r = 10(8187)-(580) (140)/ (10(34018) - (580)2) (10(1982)-(140)2) = 670/909=.73

Correaltion
80
70
60
50
40
30
20
10
0
1

10

Correlations
sales
1
.735*

sales
exp
*. Correlation is significant at the 0.05 level

exp
1

The graph shows closeness of correlation lines while the correlation coefficient is found to be .73
that is positive and moderate. The positive sign shows that two variables are directly related.
The range of correlation is between +1 to -1 and the more it is closer to 1 it is strong, such that
value above 0.8 are considered as strong.
Selling and Distribution expenses to sales ratio
=selling expenses/sales*100
Months

Selling

and
19

Distribution Sales

Ratio

expenses
1100
1300
1400
1600
1600
1500
1500
1400
1300
1300
Total
Average ratio

Jan
Feb.
march
April
may
June
July
August
September
October
Total

12500
14000
25000
20000
35000
38000
42000
36000
32000
28000

Task 5
Project Plan
Cookie Baking Project
Resources of project

2 cooks
Oven 1
Cookie dough ingrediants

Time
80 minutes but time can be reduced when parallel activities are performed.

20

8.8
9.285714
5.6
8
4.571429
3.947368
3.571429
3.888889
4.0625
4.642857
56.37019
5.63

CPM

A-15

E-12

B-5

F-10

D-4

C-2

H-12

J-3

I-10

G-4

Critical Path
Path

1=A-E-F-J

Path

2=A-E-H-I-J

Path

3=

Path

4=B-C-D-E-H-I-J

15
15

B-C-D-E-F-J

=
=

+
8

12
12

4
+

10

12

12

12

10
+
12

+
10

10

=
3

=
3

40

52

39

51

Path 5=B-C-G-H-I-J = 8 + 2 + 4 + 12 + 10 + 3 = 39
The second is longest path that is deemed to be critical path, it shows time to complete the
project is 52 minutes.

21