Conor Kerr
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Conor Kerr
[Email address]
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Unit 6: Business decision Making Unit 6: Business decision Making

Contents LO1 2 Introduction 2 Scenario 2 Primary and Secondary Data 2 Primary Data 2 Secondary Data 3 Collection Method 3 Questionnaire 3 Conclusion 4 LO2 4 Task 1 4 2.1&2.2 5 2.3 6 2.4 6 LO3 8 Task 1 8 3.1&4.1 9 3.2 11 3.3 11 3.4 17 LO4 24 Task 2 24 4.2 24 Task 3 27 4.3 27 Sources of Data 29

LO1

Introduction
The following assignment will look at different methods and sources in the collection of data. The research will include both primary and secondary forms of data and a plan will be formed to successfully help address a chosen business problem. An appropriate methodology will be used in the collection of data including the outline of sampling framework. A questionnaire will be designed and used as the main method of gathering primary data.

Scenario
3 mobile is a large mobile phone provider within Ireland. The mobile phone industry is fiercely competitive and 3 Ireland faces big competition from the likes of Vodafone and Eircom. 3 wishes to better understand the general Irish consumer and their behaviours in order to better target and market their products and services. The hope is that with a better understanding of consumers including their needs, wants and behaviours, 3 can entice consumers with better contract packages than the competition.

Primary and Secondary Data
The research will include both primary and secondary data. Different methods and ways of gathering these types of data will be explored. The advantages and disadvantages of both will be looked at and considered and also the difference between quantitative and qualitative forms of data.

Primary Data
Primary data is first-hand information or information gathered by you that didn’t exist before hand. It is more reliable than secondary data and it will be the main method of collecting data for this plan. Primary data is often collected by surveys or questionnaires and this will be the chosen method for this assignment. A questionnaire will be created with specific questions that best achieve the aim of better understanding 3’s customers. The method that will be used in order to carry out these questionnaires is that of phone calls. While surveys done over the phone will indeed cost more than sending emails or letters to customers, it is felt that generally face-to-face or phone calls provide better interaction with customers. Carrying out calls to 3’s customers will of course take up time and resources that could be spent elsewhere but considering 3 obviously has all the mobile numbers of their customers it will lead to better interaction although it may come a smaller percentage. With email or post, while it is cheaper many customers will fail to fill out the questionnaires. Another advantage with calls is that the potential of a customer misunderstanding a question is greatly reduced as a question can be explained by the caller.

Secondary Data
Secondary data is essentially using someone else’s primary data. Research information that is already available can be insightful and even help guide your own primary research. It is generally a lot cheaper than primary data however it may not be as reliable. Sometimes it is not certain who exactly carried out the research and whether or not there was any bias. In the case of 3 research will be done to help better understand the behaviours of Irish mobile users and their behaviours. Any reports released over the last few years regarding Irish mobile users behaviours including statistics will be considered and may help guide the approach taken with our own primary research.
A report carried out by IABIreland in late 2013 found some interesting facts about irish mobile users and their smartphone habits. Surveys carried out with a sample size of over 400 people found a huge rise in the amount of people who own a smartphone and importantly that “41% use their mobile more for online than calls/text.” The fact that this survey is now almost two years old means that that figure has almost certainly risen in that time, especially when you take into account 4G speeds, bigger phones, higher resolution screens etc.
This survey is relevant because it indicates that online is very important for Irish mobile users, perhaps now even more so than calls and texts. When creating mobile plans for customers this maybe an important fact to consider in order to offer consumers the best mobile contracts available that suit their needs.

Collection Method
The collection method will largely be gathered through quantitative research. The research will be collected over a larger sample size than qualitative research would allow, therefore being more focused on obtaining numerical data, statistics and gaining insights into consumer behaviours, opinions, attitudes and trends. The data will be gathered by short telephone surveys. It will be important to not have the surveys take too long as it will irritate customers. A short questionnaire will be designed and used for callers to follow. The sample will be random selection and cover around 1000 3 customers.

Questionnaire
The questionnaire will be kept to a shorter length as to not irritate busy customers. The questions will be closed ended in order to keep questions simpler and to more easily obtain results, facts and statistics.

1. How many hours do you spend online on your mobile device per day?
<1 1-2 2-4 >5

2. How many hours to you spend talking on your phone per day?
<1 1-2 2-4 >5

3. What is your preferred method of text communication?
SMS or online messengers such as WhatsApp or Facebook

4. How often do you change your mobile device?
Every year whenever my contract ends every few years whenever my phone stops working

5. How important is 4G speeds to your mobile plan?
Not important somewhat important very important

6. How much extra per month would you be willing to pay for 4G?
Nothing €5 €10

With these types of closed ended questions The research will be able to gather clear statistics and facts about customers, their habits and behaviours, their preferences and what they are willing to pay for.

Conclusion
Overall we have looked at a business problem for the company 3. The research has discussed both primary and secondary data including the advantages and disadvantages and the collection method used for both. A plan was developed for the collection of both forms of data in order to help with chosen business problem.

LO2

Understand a range of techniques to analyse data effectively for business purposes (learning outcome 2)
Task 1
This tasks offers you an opportunity to achieve LO2: 2.1, 2.2, 2.3, 2.4

Cathy, the owner of a shop selling clothes, has decided to have an in-store promotion. She has collected some sales data which she is finding it difficult to analyse. So she has decided to hire you as her consultant to assist her in this area. In discussions with her, you find out that she has a larger profit margin when she sells items priced at more than £50.00 compared to items priced up to £50.00.

The data below shows the amount of money spent by 100 customers.

Amount Spent (£) | No. of customers (f) | Midpoint(x) | F(x) | 10-19 | 18 | 15 | 270 | 20-30 | 20 | 25 | 500 | 30-40 | 16 | 35 | 560 | 40-50 | 14 | 45 | 630 | 50-60 | 12 | 55 | 660 | 60-70 | 8 | 65 | 520 | 70-80 | 6 | 75 | 450 | 80-90 | 4 | 85 | 340 | 90-100 | 2 | 95 | 190 | Totals | 100 | | 4120 |

2.1&2.2
You are required to calculate the following and advise her on the promotion activity she carried out: i. Mean, Median and Mode. ( 2.1 & 2.2)

In order to calculate the mean we need to take the midpoint spent by each of the customers, multiple the midpoints by the number of customers and then divide by 100(the amount of customers).

Mean = €41.20

The median is the mean of the middle two numbers which is 50 & 51. They are in the group 30-40

Estimated Median = L + (n/2) − cfb × wfm

30 + (100/2) – 38 / 16 x 10

30 + 12/16 x 10

30 + ¾ x 10

= 37.5

So the median = €37.50

The modal group = 20-30

Estimated Mode = L + | fm − fm-1 | × w | | (fm − fm-1) + (fm − fm+1) | |

20 + 20-18/ (20-18) + (20-16) x10

20 + 2/6 x10

= 23.33

The mode = €23.33

2.3 ii. Range. (2.3)

The range for a grouped set of data is the highest upper class boundary – the lowest lower class boundary. =95-15

=80

The range = 80

2.4 iii. 25th Percentile (Lower Quartile) and 75th Percentile (Upper Quartile) and explain the use of Percentile. (2.4)

Percentiles are useful in order to separate into groups, data and look at values within ranges. For example if I am the 75th percentile in a class test result, that means that I achieved a higher grade than ¾ of the rest of the class.

Lower quartile =

Q1 = Lq1 + (n/4 – cf/ fq1) W

20+ ( 100/4 – 18/20) 10

20+ 7/20 x 10

=23.5

The lower quartile = €23.50

Upper quartile =

Q3 = LQ3 + ( 3N/4 – cf / fq3) W

50 + ( 75 – 68/12) 10

50+ 7/12 x 10

= 55.83

Upper quartile = €55.83

iv. Inter-quartile range. (2.4)

The inter quartile range = Q3- Q1

= 55.83 – 23.50

= 32.33

The inter quartile range = €32.33

Additional Information: Sales (units) | 20 | 40 | 50 | 55 | 60 | 70 | 80 | 90 | 100 | Discount (%) | 1 | 4 | 6 | 6 | 10 | 12 | 13 | 14 | 15 |

v. Explain correlation coefficient adding in the formula and discuss it advantages to a business. (2.4)

The correlation coefficient is used in a business sense in order to determine the relationship between two variables or data variables. It can used for example to determine whether there are enough products being produced in a certain time frame within a business and whether the results are satisfactory. It is calculated using the following formula.

The correlation coefficient can range from -1 to +1. -1 indicates perfect negative correlation while +1 indicates perfect positive correlation. 0 represents no correlation, essentially no relationship at all.

LO3

Task 1
This tasks offers you an opportunity to achieve LO3: 3.1, 3.2, 3.3, 3.4 and 4.1

The managing director of a company that sells clothes imported from Spain, Italy and France in the UK has hired you as a Sales Analyst. The managing director gives you the following data and asks you to prepare a report and present your findings to the Board of Directors in a presentation. However, before you can even make a presentation and write a report, you are to produce different types of graphs and charts that you can use in your presentation and report. The following is the data set the managing director has given you: Advertising and Sales data 2000-2013 | Year ending 31st March | Advertising Cost £'000s | Sales £'000s | Year ending 31st March | Advertising Cost £'000s | Sales £'000s | 2000 | 200 | 1200 | 2007 | 760 | 2800 | 2001 | 240 | 1400 | 2008 | 880 | 2900 | 2002 | 300 | 1500 | 2009 | 920 | 3100 | 2003 | 340 | 1800 | 2010 | 980 | 3450 | 2004 | 400 | 2200 | 2011 | 1020 | 3600 | 2005 | 480 | 2300 | 2012 | 1100 | 4100 | 2006 | 520 | 2600 | 2013 | 1170 | 4670 |

Net Income Generated by 5 Branches of the company in 2013 | | £'000s | London | 240 | Manchester | 180 | Edinburgh | 160 | Cardiff | 140 | Liverpool | 130 |

3.1&4.1
Produce line graphs for advertising and sales figures given from 2000 to 2013, pie and bar charts for net income generated by the five branches of the company and scatter graphs of advertising and sales figures using spreadsheets.(3.1 & 4.1)

The following pics were taken from excel and provide data results including line graphs, pie charts, bar charts and scatter graphs. These are screenshots and the excel sheets will accompany this assignment.

3.2
Create trend lines in the spreadsheet on scatter graphs (scatter plot previously plotted) to assist in forecasting sales figures for years 2014 – 2016. Get the linear equation of the line fitted on the scatter graph. (3.2 &4.1)

The image above created in excel provides a trend line helping forecast the future growth of the company. As can be seen with an increase in advertisement year after has led to a significant increase in sales.
Equation of a line = y = mx+b
Y= 246.63x - 490162

3.3
Prepare a business presentation using suitable software (power point) and techniques (graphic representations of data) to disseminate information effectively regarding the above scenario of the company. (3.3 )

3.4
Produce a formal business report for the Board of Directors meeting using the above scenario and the work that you have done in 3.1, 3.2 & 3.3. (3.4 )
The following business report was created using powerpoint.

LO4

Task 2

4.2

This tasks offers you an opportunity to achieve LO4: 4.2

The activities involved in a computer installation project are given below:

Description | Activity | Preceding Activity | (Days) | Physical preparation | A | - | 4 | Organisational planning | B | A | 3 | Personal selection | C | A | 15 | Equipment installation | D | B | 10 | Personnel training | E | D | 4 | Detailed system designing | F | E | 6 | File conversion | G | F | 9 | Establishment of standards | H | C | 2 | Program preparation | I | B | 10 | Program testing | J | D | 9 | Finishing Documentation | K | G,H,I,J | 12 | Follow Up | L | K | 20 |

Required: i. Prepare a network diagram for activities using Microsoft Project or Open Project. ii. Calculate the Project Duration. iii. Clearly mark the Critical Path. iv. Prepare a Gantt Chart and state the benefits of using it as a Project Management Tool. (4.2)

Using Project I was able to create a network diagram of activities seen above.

The image above shows the total duration for the activities. The total number of days that the activities amount to = 104 days.
This image shows the critical path including the critical activities of the diagram.

The red sections highlight the critical activities.

The benefits of a gantt chart
There are many benefits to using a gantt chart. Some of the main benefits is structure, clarity and planning. Using a gantt chart gives an organisation or user a clear view of the timeline in which to complete a project and its tasks. The tasks can easily be broken down, progression can be viewed and teams can clearly see what remains. Being able to view all these timelines, tasks and activities in extremely valuable. It helps keep projects structured and targets met. The visual method really helps track task progression. The charts help break projects down into more focused and manageable tasks which helps the overall project feel less overwhelming. One of the major advantages of gantt charts is time management. Better organisation of tasks greatly increases efficient time management.

Task 3

4.3

This tasks offers you an opportunity to achieve LO4: 4.3
A company is considering which of two mutually exclusive projects 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 ACash flow | Project B Cash flow | Investment | -200,000 | -200,000 | 1 | 50,000 | 40,000 | 2 | 65,000 | 75,000 | 3 | 75,000 | 85,000 | 4 | 80,000 | 60,000 | 5 | 90,000 | 35,000 |

You are required to: I. Calculate the NPV and IRR of each project. II. Recommend which project you would undertake, if any. Provide reasons for your position.(4.3)
Note: Please use 20% as the second Discounting Factor while calculating IRR.

NPV = ∑ {Net Period Cash Flow/(1+R)^T} - Initial Investment
Project A NPV and IRR

Project B NPV and IRR

(4.3)
Without doubt Project A is the investment I would recommend. The statistics show that year after year it is generating more income. The NPV is much greater. In fact it’s over 50% greater. Also the IRR is also significantly higher with a rate of 21% compared to just 15% of Project 2.

Sources of Data http://iabireland.ie/wp-content/uploads/2013/11/REDC_Mobile_Future_Nov_2013.pdf http://www.snapsurveys.com/blog/what-is-the-difference-between-qualitative-research-and-quantitative-research/ http://www.statisticshowto.com/what-is-the-correlation-coefficient-formula/ https://www.mathsisfun.com/data/frequency-grouped-mean-median-mode.html http://www.brighthubpm.com/templates-forms/2434-top-ten-benefits-of-a-gantt-chart/ http://www.wikihow.com/Calculate-Npv-in-Excel https://www.mathsisfun.com/money/internal-rate-return.html http://www.experiglot.com/2006/08/07/how-to-calculate-net-present-value-npv/