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Business Decision Making

University: REGENT COLLEGE LONDON

  • Unit No: 6
  • Level: Undergraduate/College
  • Pages / Words 3250
  • Paper Type: Assignment
  • Course Code: D/601/0578
  • Downloads: 0
Answer :
Organization Selected : Foods For Friends

INTRODUCTION

In the present world, the main objective of a business is to earn and maximise its profits and to gain competitive advantages in the market. Both can be achieved by taking and application of effective and efficient decisions. This makes decision-making a crucial and important process of a business. The present report will represent a scenario of a restaurant Food for Friends of its expansion in new market, which presents the collection of data from primary and secondary resources, interpretation of data with various planning tools and graphical representation of the findings from the collected data.

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TASK 1

1.1 Creating a plan for collection of primary and secondary data

The taste of food has become one of the major factor amongst many other factors for food lovers. Factors like ambiance, services, entertainment with food services have become more popular and in the present days for success of restaurants and food business. For starting a new chain at a new market, a thorough research and planning for business success and gaining competitive advantage is a necessary requirement.

With the innovation of technology the rather than making lives of everyone easy, more and more people are getting engaged in technology. This has increased in less number of people getting less time to dine out. The main purpose is to present data collected, which will reflect the actual scenario in current market.

Primary data: The data collected from original respondent under the supervision and control of an investigator, which is fresh and collected for the first time (Peng and et.al., 2015) . Collection of data for market research makes the process easy by tailoring specifics and details for which information is needed. The data and information is gathered from observation and is collected directly from first hand experience.

Various sources from which data can be collected are observation, questionnaires, experiments, interviews, surveys etc. In the present report, information related to eating habits, dining habits in restaurants with family or friends will be collected. To clearly identify the problem, an insight for its occurrence and reason for its existence is required. An effective source from above mentioned sources can be selected to refer the business problem of reduction in number of people dinning out in restaurants.

Secondary data: The data which already have been collected earlier by others is referred to address the present business problem. The data in secondary sources are readily available and does not require any lengthy process for collection of data. The main purpose is just referring the already collected data, interpret and analyse such data to address the present scenario and problem. This is economical and less expensive process requiring lesser efforts. Short and time saving process. In present scenario, secondary data can be collected through organisation’s records, financial records, surveys conducted by the government and agencies and government censuses and information collected by government departments.

1.2 Survey methodology and sampling frame used in research

Sampling Frame: The source material or devises from which a sample is drawn is referred as sampling frame. This is a list from the population which, can be sampled this means that everyone and everything one want to study in research process(Carter, 2017). This includes individuals, institutes, households, stores etc a care shall be taken while caring out sampling frame that it is adequate for your need, it shall consider all the persons in target population, excludes no required population and includes accurate information that can drew relevant information from individuals so sampled (Flaherty, Honeycutt and Powers, 2015). In the present case, target population for sampling frame would be individuals, youth, households, and working people who lives in the vicinity of London.

Survey Methodology: To conduct a survey effectively and efficiently is a major implication of justification of the data so collected through survey. By Survey methodology we simply mean, to select appropriate time and application of effective sampling technique to carry out the research work on the samples selected from them. Therefore, to conduct a survey on Food for friends, they must select an appropriate method to carry out the research. The questionnaire method is the best type to conduct survey to identify needs and wants of targeted consumers. To understand the mind set of people is necessary to serve them right and with what they expect from restaurants.

1.3 Designing a questionnaire for collection of data

Drafting of a questionnaire for carrying out research for detecting the reasons for decrease in number of people dinning out in restaurants (Xie and et.al., 2016). The questioned so frame are directly focuses on the problem and consist both open ended and close ended questions.

Question 1 What colour scheme you like at your restaurant?

(A) Bright and vibrant

(B) Dark and cosy

(C) Natural and peaceful

(D) Colourful

Question 2. Please rate the quality of services received here:

(A) 1

(B) 2

(C) 3

(D) 4

(E) 5

Question 3. The server who served you the food were

(A) Prompt and efficient

(B) Informative

(C) Courteous

(D) Inefficient

Question 4. Would you like any entertainment while having your food?

(A) Yes

(B) No

Question 5. If yes, what would it be?

(A) Live music

(B) Recorded music

(C) Karaoke

(D) Stand ups at stage

Question 6. Would you like free Wi Fi at restaurant?

(A) Yes

(B) No

Question 7. How are the parking facilities of restaurant?

(A) Good

(B)Best

(C) Excellent

Question 8. What is the price you are ready to pay for your breakfast?

Ans:

Question 9 Do you like the combos of meal served for lunch and dinner?

(A) Yes

(B) No

Question 10. How do you like the response of the managers in the restaurant.

Ans:

2.1 Interpretation of data collected from survey

Year

Sales

Profit

     

2008

800

180

2009

960

220

2010

1100

265

2011

990

240

2012

1040

254

2013

1220

290

2014

1360

320

2015

1500

355

2016

1610

390

2017

1740

428

Interpretation:

From the above figure it can be interpreted that the sales from year 2008 to 2017 have shown an immanence growth. The sales for 2008 were 800 which have grown to more than double for year 2017 which is 1740. With an increase in sale the profits for the restaurant have also increased in the recent years(Karlsen and et.al., 2018). For year 2008 the profit was 180 which have increased to 428 fir the year 2017. while the sales have increased just a little more than then double, the profits have shown growth for far more than the double. This implicate that either the sales revenue generated have increased or the cost incurred on have decreased as the profits are in more than the sales percentage of the restaurant.

2.2 Interpreting the analysis of result and presenting conclusion

 

Sales 

 Profit

     

Mean

1232

294.2

Standard Error

97.90926

24.81344

Median

1160

277.5

Mode

#N/A

#N/A

Sample Variance

95862.22

6157.067

Kurtosis

-1.06569

-0.70532

Skewness

0.384443

0.393693

Range

940

248

Minimum

800

180

Maximum

1740

428

Sum

12320

2942

Count

10

10

 Interpretation:

From the above calculations it is clear that mean of the sales is 1232 and profits is 294.2. the standard error of sales is more than that of profits. The standard error of sales is 97/9092 while for profits it is 24.81344. the above table shows the analysis of sales and profits of 10 years for the restaurants. Te above patterns shows that with a rapid growth in sales profit has also grown faster than the sales. The mode calculated for sales is 95862.22 and for profits it is calculated as 6157.067.

2.3 Measures of dispersion used for data analysis

Standard Deviation

309.6162

78.46698

It is a measure of dispersion for a set of data from its mean. It is calculated to see the level of dispersion of sale and profit of Food for friends restaurant from their actual mean. The actual mean of sales is 1232 and the standard deviation is 309.6162. this is a key measure for risk analysis of a business (Cash, 2015). A large dispersion shows that how much returns on fund is deviating from actual. Here a large deviation can be seen which means the sales are deviating to a large extended from the original. The actual profits is also deviating. The deviation can be seen, sales have shown growth over past 10 years which is a good information for the restaurant. With the deviation in sales, profits also have shown deviation which means that with increase in sales profits of the restaurants have aloes increased.

2.4 Application of quartile, percentiles and the correlation coefficient for drawing conclusion

 Quartile and percentile

Sales

Profit

Quartile 1 and 25th percentile

1002.5

243.5

Quartile 2 and 50th percentile

1160

277.5

Quartile 3 and 75th percentile

1465

346.25

 Correlation

Sales

Profit

Sales

1

.997

Profit

.997

1

Interpretation: Percentile is the measure where the percentage of total values are same or below the measure. Quartiles are valve that divides a group in percentage of four groups which contains approximately equal number of observation. The four group of percentage are 25%, 50%, 75% and 100%. 

TASK 2

3.1 Presentation of finding with incorporation of graph and charts

Theme 1: What colour scheme you like at your restaurant?

answers

respondents

percentages

(A) Bright and vibrant

8

40.00%

(B) Dark and cosy

3

15.00%

(C) Natural and peaceful

5

25.00%

(D) Colourful

4

20.00%

total

20

100.00%

Interpretation:From the above graph it can be interpreted that out of total 20 respondent who were asked about the colour theme of the restaurant agreed for bright and vibrant colours. The choice majority of people is with bright colours which reflect the positivity and happiness. The new restraint shall be given a theme which reflect positivity as well as subtleness in its ambiance. The choice of people shall be given importance as they are the one who will come and dine in the restaurant so it is important for them to like the asthenosphere and surrounding of the restaurant

Theme 2 : The server who served you the food were

answers

respondents

percentages

(A) Prompt and efficient

9

45.00%

(B) Informative

6

30.00%

(C) Courteous

5

25.00%

(D) Inefficient

1

5.00%

total

20

100.00%

Interpretation: another question asked to the respondent was related to the services provided them by the server or waiter at the restaurant. The majority of the respondent said the server were prompt and efficient as they wise quick in responding to the call and suggesting consumers with lot of choices and also helped them to chose the food according to their taste and preferences (Krosnick, 2018). This makes a lot of consumer happy and satisfied. The another group of respondent liked the information which the server carries about the details of food which the serve in the restaurant. This helped many consumers' it actually know what there are about to order and eat and also made aware two of the consumer about the food they are allergic with. One of the server was represented as inefficient at the restaurant so the server at restraint shall be motivated to keep the dame spirit in serving the consumers with same enthusiasm to want them to come back.

Theme 3: Would you like any entertainment while having your food, if yes, what would it be?

answers

respondents

percentages

(A) Live music

5

25.00%

(B) Recorded music

3

15.00%

(C) Karaoke

2

10.00%

(D) Stand ups at stage

10

50.00%

total

20

100.00%

Interpretation:  people love to be entertained while they enjoy their meal in the restaurants. These days a trend of stand ups at stages have increased. The stands up can be related to motivational talks, jokes, singing, comedy, music or anything which one like to do at the stage to entertain people (Importance of objectives for restaurant survey, 2018). 50 % of the people liked to have stand ups at the restaurant. The preference for the karaoke was very less that is only 5%. The dereference towards the live music was 25% but for recorded music it was only 15%.

3.2 Forecasting business information by creating trend lines in graph

Trend line 

Interpretation: the trend line of F&F is showing a growth in sales and profits as well. The sales have from past 10 years have grown up and shown an immanence development in the profits also. This shows a prosperous future to the restaurant (Sampling frame, 2018). This trend line also reflate that the percentage growth in the profits is higher than the percentage growth in the sales, which is a result in cost cutting and reduction in operating cost of the business. The profit line can go parallel in the future as increase in sales is going upward.

Column Graph

Interpretation: the sales and profits for the restaurant business have increased over past 10 years. In year 2008 the profit of the business was 200 and sales were 800. for the year 2012 the sales were increased to 1100 and the profit raised to 220. in the years 2016 the sales shoot up to 1600 and the profit was 400 approximately. This shows that when sales got double the profit was nearly double which shows that business has maintained a good position over a period of 8 years.

3.4 Preparation of Formal business report

To

Manager of F&F

 Date: 16th July 2018

Subject: Report on expatiation of the restaurant in London

This is the report present to the mangers of restaurant Food for friends which have a business expansion plan of the restaurant in the London City. With the reference to the above subject a detail and thorough survey was conducted to determine the market place and the taste and preferences of the people. As it can be seen that the business have made a growth in its sales and profits in last 12 years.

The preference of the consumers are to be mentioned here. The ambiance and colour theme which people of London city prefer are bright and colourful. They love a cheerful and positive environment. Keeping these things in the hand the interior of restaurant shall be designed so that more consumers are attracted towards the restaurant and also wants to come bake to experience the environment and testy food at the restaurants.

This is suggested that preference to consumer choice shall be kept at priority as people over there are quite particular about the ambiance of the restaurants they choose to eat.

Sincerely

Research Analyst

TASK 3

4.1 Use of appropriate information processing tools

How information system helps in decision-making of food for friends:

Decision makings is the first and foremost important task in every organisation. Managers of all type of industry have to deal with it. Decision making helps organization to attain their objectives. Following three types of information system are there which ease our work and helps in decision making.

1- DECISION SUPPORT SYSTEM

Decision support system is used by the top management to take or make decisions. The main objective of decision support system is to give solution to the problems that are undefinable and are dynamic in nature. DSS uses the innovatory numeric models, and statistical techniques to provide solutions. Examples of decision support system includes financial planning system and credit recover system of food for friends. Would you like any entertainment while having your food?f yes, what would it be?

2- MANAGEMENT INFORMATION SYSTEM

Management information system are especially developed to support all the function of management such as planning, organising, directing and controlling. These are the function of management which helps for decision making. These information products provide information that confirms to decision making of all the managers. Decision making is not mere a process its a heart of the every organization. All the productivity of the food for friends in depends upon the decision-making. In the era of dynamism it is very important to adopt MIS to get a better decision.

3- TRANSACTION PROCESSING SYSTEM

Every organisation needs to process transaction in order to perform day to day business operations. Transaction differs from organisation to organisation. In goods manufacturing firms include the transaction like order entry, receipt of goods, shipping charges etc. while in service providing industry like hotels, bank includes the transaction like deposit, payment, orders etc. Transaction is the part of finance department which is very essential and base of the business. Small mistake in transaction can lead to a big loss. Hence, TPS provide an easy and accurate processing of transactions speedily with less possibility of errors. Therefore, it provide an efficiency for sound decision making.

4.2 Determination of critical path and preparation of project plan

Critical path: 1+4+5+7+9+10 

Duration of critical path

Path

Duration (in days)

1

8

4

6

5

4

7

4

9

8

10

1

Total

31

Interpretation: the flowchart shows the critical path that should be followed so that the work can be completed on the fastest and shortest tome duration. The day 1,4,5,7,9 and 10 are the critical path days and to follow all the days together will reduce the processing days of an activity.

4.3 Use of investment appraisal tools in decision making

Tools and techniques of capital budgeting are highly significant which in turn provides high level of assistance in evaluating the viability of proposed investment. On the basis of cited case situation, restaurant owner wishes to invest £190000 in the expansionary project. In this regard, by applying the tools & techniques of investment appraisal such as NPV and IRR owner of F&F can assess whether concerned capital project will prove to be profitable or not.

Calculation of net present value 

Year

Cash inflows (in £)

PV factor @ 12%

Discounted cash inflows

1

50000

0.893

44642.9

2

64000

0.797

51020.4

3

58000

0.712

41283.3

4

70000

0.636

44486.3

       

 Total discounted cash inflows

   

181433

 Less: initial investment

   

190000

 Net present value

   

-8567.2

 Calculation of internal rate of return 

Year

Cash flows

0

-190000

1

50000

2

64000

3

58000

4

70000

IRR

10%

By applying tool of investment appraisal on concerned cash-flows it has assessed that concerned project should not be accepted by the owner of F&F. Moreover, after the period of 5 years such expansionary project will offer negative returns such as 8567.2 GBP. In addition to this, IRR associated with such project accounts for 10% which in turn highly lower. Thus, referring all such aspects it can be entailed that manager of F&F should focus on investing money in the profitable projects. Hence, from the growth perspective owner of F&F should avoid such capital investment proposal.

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CONCLUSION

From the above report it can be suggested to the restaurant Food for friends that it is a good decision for them to open a chain of restaurant in London. The people are very welcoming and likes the ides of a new restaurant in the city with a change and new amenities and ideas. All of this is suggested on the basis of the survey carried out through the questionnaire method of primary sources of collecting data. It can also be concluded for the old chain of the restaurant the profits and sales have shown an immanence growth. The growth parentage of profit is higher than the sales which reflects that restaurants and its owner have gained a control over the cost incurred for providing food and services at the restaurant. This is also a driving factor for restraint to open a chain in London as well.

Related Samples:

Models and Systems Used in Business Communication

REFERENCES

  • Bassi, F., Croon, M. A. and Vidotto, D., 2017. A mixed latent class Markov approach for estimating labour market mobility with multiple indicators and retrospective interrogation. Survey Methodology. 43(1). pp.107-124.
  • Carter, D., 2017. Creativity in action–the information professional is poised to exploit the fourth industrial revolution: The business information survey 2017. Business Information Review. 34(3). pp.122-137.
  • Cash, T. F., 2015. Multidimensional Body–Self Relations Questionnaire (MBSRQ). In Encyclopedia of feeding and eating disorders. (pp. 1-4). Springer Singapore.
  • Flaherty, T. B., Honeycutt, E. D. and Powers, D., 2015. Exploring text-based electronic mail surveys as a means of primary data collection. In Proceedings of the 1998 Academy of Marketing Science (AMS) Annual Conference. (pp. 260-264). Springer, Cham.
  • Karlsen, M. C and et.al., 2018. Web-Based Recruitment and Survey Methodology to Maximize Response Rates from Followers of Popular Diets: the Adhering to Dietary Approaches for Personal Taste (ADAPT) Feasibility Survey. Current Developments in Nutrition. 2(5). p.nzy012.
  • Krosnick, J. A., 2018. Questionnaire design. In The Palgrave Handbook of Survey Research. (pp. 439-455). Palgrave Macmillan, Cham.
  • Motl, R.W and et.al., 2015. Preliminary validation of the short physical performance battery in older adults with multiple sclerosis: secondary data analysis. BMC geriatrics. 15(1). p.157.
  • Peng, J.J and et.al., 2015. A multi-criteria decision-making approach based on TODIM and Choquet integral within a multiset hesitant fuzzy environment. Applied Mathematics & Information Sciences. 9(4). p.2087.
  • Swart, E and et.al., 2015. Good practice of secondary data analysis (GPS): guidelines and recommendations. Gesundheitswesen (Bundesverband der Arzte des Offentlichen Gesundheitsdienstes (Germany)). 77(2). pp.120-126.
  • Xie, F and et.al., 2016. Linkage of a population-based cohort with primary data collection to Medicare claims: the reasons for geographic and racial differences in stroke study. American journal of epidemiology. 184(7). pp.532-544.
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