BUSINESS DECISION MAKING

Virginia Cecilia Roman

H1001915

Table of contents

Task 1 | | L.O. 1.1 | 3 | L.O. 1.2 | 3 | L.O. 1.3 | 5 | Task 2 | | L.O. 2.1 | 6 | L.O. 2.2 | 7 | L.O. 2.3 | 10 | L.O. 2.4 | 12 | Ask 3 | | L.O. 3.1 (see Annexes) | 13 | L.O. 3.2 | 13 | L.O. 3.3 | 14 | L.O. 3.4 | 15 | Task 4 | | L.O. 4.1 | 17 | L.O. 4.2 | 24 | L.O. 4.3 | 26 | Annexes | 28 | Bibliography | 32 |

Task 1 (LO1: 1.1, 1.2, 1.3)
1.1 As the new business development manager, you have been tasked to expand the ABC Ltd business operations in the UK. To provide the right information, you need relevant information to be presented to your senior management team (SMT) to enable them make the right decisions as to whether to expand in these two countries.
You are required to create a plan for the collection of primary and secondary data for the expansion project.
Researchers need to consider the sources on which to base and confirm their research and findings. They have a choice between primary data and secondary sources and the use of both, which is termed triangulation, or dual methodology.
The secondary data are data which have already been collected elsewhere, for some other purpose, but which can be used or adapted for the survey being conduct (Bpp, 2004, p.7). Secondary sources are data that already exists such as :previous research, official statistics, mass media products, diaries, letters, government reports, web information, historical data and information.
In order to investigate the production capacity and the firm behavior we need to collect primary data. Primary data are collected especially for the purpose of whatever survey is being conducted (Bpp, 2004, p7).This type of data are generally afresh and collected for the first time. The primary source of data will be the information given by the respondents through a survey questionnaire that is formulated by the researcher. As quantitative type of research, it presented the data collected using tabular and textual forms. All data are collected, verified, analysed and interpreted specifically the variables of the study.
Plan for collection: * Primary data: design a questionnaire * Secondary data: websites, magazines, articles, books

1.2 Following your plan above, present the survey methodology and sampling frame used in your research .
Survey methodology studies the sampling of individual units from a population and the associated survey data collection techniques, such as questionnaire construction and methods for improving the number and accuracy of responses to surveys.
Sampling frame is a set of information used to identify a sample population for statistical treatment. A sampling frame includes a numerical identifier for each individual, plus other identifying information about characteristics of the individuals, to aid in analysis and allow for division into further frames for more in-depth analysis. It is a list of all those within a population who can be sampled, and may include individuals, households or institutions.
The purpose of this project is to provide enough information for the directors of a restaurant in order to help them decide whether to open a restaurant in London. I chose the Wembley area for applying the questionnaire .
Secondary data
I’ve browsed the internet to find relevant information about Wembley.
Wembley locality profile as it’s presented in the article made by the Directorate of Public Health & Regeneration,NHS Brent, Wembley Centre for Health and Care in the year 2012.For every category I’ve drawn a conclusion which is relevant for our case ( opening a new restaurant in the Wembley area).
Population: estimated to be 81,519
Age: the locality population is relatively young with 26% of residents under 20 years of age, and 65% of residents are under 45 years of age. Conclusion :the restaurant should target young people.

Ethnicity: Wembley central and Alperton have large proportions of Asian and Asian British populations. Conclusion: the menu should be appropriate for all ethnicity but mostly for White and Asian.

Unemployment: Wembley has the second lowest rate of unemployment in the borough but is still 32% higher than the England rate. Conclusion: people won’t have very high income rate.
Diabetes: almost 10 % of the population has diabetes. Conclusion: including a low-carbohydrates, low-sugar section in the menu.
Competitors: according to www. tripadviser.com the top 3 most reviewed restaurants in Wembley are: Coast to Coast( American cuisine ), Young's Peking Restaurant( Chinese cuisine) and Mumbai junction( Indian cuisine). Conclusion: the new restaurant should have a various types of dishes in the menu.

Primary data
The survey applied in this report will have a random sampling, arbitrarily interviewing people around Wembley area using a self-designed questionnaire followed by the analyse the results statistically.

1.3Questionnaire design
The questionnaire that I have designed contains 14 questions which I think are relevant when opening a new restaurant. I have interviewed a number of 25 people (12 men and 13 women) between the ages of 18-61 .

1. Are you a male or female? * Male * Female 2. Do you live in the Wembley area? * Yes * No 3. Do you eat out in the Wembley area? * Yes * No 4. How old are you?

5. How often do you eat out?

6. How much do you spend per week on eating out?

7. When eating out,do you prefer fast-food or restaurant? * Fast-food * Restaurant 8. Do you use applications on your phone to find the best restaurants in town? * Yes * No 9. How many people are normally in your party when you are eating out?

10. When you eat at a restaurant you pay by card or cash? * Card * Cash 11. What type of food do you prefer?

12. Do you prefer take-away meals? * Yes * No 13. Do you eat out more often for breakfast, lunch or dinner?

* Breakfast * Lunch * Dinner 14. What is your monthly income?

Task 2 (LO2: 2.1, 2.2, 2.3, 2.4) 2.1 Twenty five sales staff from the sales and marketing department of your department took course in basic Excel spreadsheet. The test at the end of the course and marks obtained by the staff shown in the table below. The marks were out of 50 and the pass mark was 20 out 50. You have been asked to process this data so that the Marketing Director can make decisions based on the results. Use representative values to summarise this data and create information to help with the decision making | | Mark(x/50) | Pass mark | No. of marks | Max mark*25 | sum of marks | marks% of max marks | 8 | 20 | 25 | 1250 | 648 | 51.84% | 11 | | | Average mark | 25.92 | | 12 | | | Median | 26 | | 16 | | | Mode | 21 | | 18 | | | Number of passed | 19 | | 19 | | | Passed % | 76.00% | | 20 | | | Number of failures | 6 | | 21 | | | Failed % | 24.00% | | 21 | | | Highest mark | 45 | | 21 | | | Lowest mark | 8 | | 22 | | | | | | 25 | | | | | | 26 | | | | | | 27 | | | | | | 27 | | | | | | 28 | | | | | | 30 | | | | | | 32 | | | | | | 32 | | | | | | 33 | | | | | | 34 | | | | | | 38 | | | | | | 39 | | | | | | 43 | | | | | | 45 | | | | | |
Statistical analysis
The average mark obtained by staff members was 25.92 out of 50 which is a little more than half of the maximum mark. The highest mark was 45 and the lowest one was 8. The median the number or average of the numbers in the middle) is 26 and the mode (the number that occurs most) is 21.

The promotion percentage is 76 % and the fail percentage is 24%. Concluding, the Excel course was promoted by more than half of the employees, meaning the course was useful .

2.2 The Production manager is concerned about the number of rejects computers produced by ABC Ltd and requested you, as part of management information for decision making, to carry out some data analysis from the table about number of rejects computer for past 10 weeks .

(a) Construct an ungrouped frequency distribution from the data
(b) Construct a grouped frequency distribution from the data using seven class intervals of equal with.
(c) Analyse the results to draw valid conclusions in a business context

(a). week 1 | week 2 | week 3 | week 4 | week 5 | week 6 | week 7 | week 8 | week 9 | week 10 | min | 13 | 3 | 19 | 23 | 11 | 22 | 28 | 22 | 22 | 31 | 3 | 17 | 30 | 23 | 16 | 9 | 33 | 28 | 24 | 23 | 8 | max | 7 | 28 | 25 | 18 | 21 | 22 | 19 | 29 | 12 | 20 | 33 | 17 | 23 | 24 | 27 | 24 | 13 | 21 | 26 | 20 | 25 | no. of values | 22 | 24 | 15 | 27 | 3 | 23 | 24 | 26 | 26 | 27 | 50 |

Ungrouped frequency distribution | max to min | f(frequency) | fr(relative frequency) | % | cumulative frequency | cumulative proportion | cumulative percent | 33 | 1 | 0.02 | 2% | 50 | 1 | 100% | | 32 | 0 | 0 | 0% | 49 | 0.98 | 98% | | 31 | 1 | 0.02 | 2% | 49 | 0.98 | 98% | | 30 | 1 | 0.02 | 2% | 48 | 0.96 | 96% | | 29 | 1 | 0.02 | 2% | 47 | 0.94 | 94% | | 28 | 3 | 0.06 | 6% | 46 | 0.92 | 92% | | 27 | 3 | 0.06 | 6% | 43 | 0.86 | 86% | | 26 | 3 | 0.06 | 6% | 40 | 0.8 | 80% | | 25 | 2 | 0.04 | 4% | 37 | 0.74 | 74% | | 24 | 5 | 0.1 | 10% | 35 | 0.7 | 70% | | 23 | 5 | 0.1 | 10% | 30 | 0.6 | 60% | | 22 | 5 | 0.1 | 10% | 25 | 0.5 | 50% | | 21 | 2 | 0.04 | 4% | 20 | 0.4 | 40% | | 20 | 2 | 0.04 | 4% | 18 | 0.36 | 36% | | 19 | 2 | 0.04 | 4% | 16 | 0.32 | 32% | | 18 | 1 | 0.02 | 2% | 14 | 0.28 | 28% | | 17 | 2 | 0.04 | 4% | 13 | 0.26 | 26% | | 16 | 1 | 0.02 | 2% | 11 | 0.22 | 22% | | 15 | 1 | 0.02 | 2% | 10 | 0.2 | 20% | | 14 | 0 | 0 | 0% | 9 | 0.18 | 18% | | 13 | 2 | 0.04 | 4% | 9 | 0.18 | 18% | | 12 | 1 | 0.02 | 2% | 7 | 0.14 | 14% | | 11 | 1 | 0.02 | 2% | 6 | 0.12 | 12% | | 10 | 0 | 0 | 0% | 5 | 0.1 | 10% | | 9 | 1 | 0.02 | 2% | 5 | 0.1 | 10% | | 8 | 1 | 0.02 | 2% | 4 | 0.08 | 8% | | 7 | 1 | 0.02 | 2% | 3 | 0.06 | 6% | | 6 | 0 | 0 | 0% | 2 | 0.04 | 4% | | 5 | 0 | 0 | 0% | 2 | 0.04 | 4% | | 4 | 0 | 0 | 0% | 2 | 0.04 | 4% | | 3 | 2 | 0.04 | 4% | 2 | 0.04 | 4% | | sum | 50 | 1 | 100% | | | | |

(b). Number of rejected computers | Interval | Number of rejected computers | 13 | 1-5 | 6 | 1% | 17 | 6-10 | 24 | 2% | 7 | 11-15 | 79 | 8% | 17 | 16-20 | 106 | 10% | 22 | 21-25 | 437 | 42% | 3 | 26-30 | 327 | 31% | 30 | 31-35 | 64 | 6% | 28 | Grand total1043 | 23 | | 24 | | 19 | | 23 | | 25 | | 24 | | 15 | | 23 | | 16 | | 18 | | 27 | | 27 | | 11 | | 9 | | 21 | | 24 | | 3 | | 22 | | 33 | | 22 | | 13 | | 23 | | 28 | | 28 | | 19 | | 21 | | 24 | | 22 | | 24 | | 29 | | 26 | | 26 | | 22 | | 23 | | 12 | | 20 | | 26 | | 31 | | 8 | | 20 | | 25 | | 27 | |

( c).
Looking at the ungrouped frequency distribution we can see that the most frequent number of rejected computers are 22,23 and 24 corresponding to a relative frequency of 10 %. The conclusion or suggestion for the owners of the business could be to produce an excess number of computers of about 25, so they can replace the rejected ones.
The grouped frequency distribution shows that the most common number of rejected computers are included in the range 21-25 (42%) followed by the 26-30 range (31%). These results also suggest a increase in production of about 25 should be implemented . 2.3 The normal distribution curve shows profit for a business in the year 2013. |

Business profits
Thousands {£‘000}

i.Given that the standard deviation is £1000, calculate the values within three standard deviations of the mean and analyse data using measures of dispersion to inform this given business scenario .

profit (£ ) | mean | standard deviation | -3SD | -2SD | -1SD | +1SD | +2SD | +3SD | 1000 | 5500 | 1000 | 2500 | 3500 | 4500 | 6500 | 7500 | 8500 | 2000 | | profit (£) | 3000 | 6000 | 10000 | 21000 | 28000 | 36000 | 3000 | | z-score | -3.00 | -2.00 | -1.00 | 1.00 | 2.00 | 3.00 | 4000 | | | | | | | | | 5000 | | Quartile (0 - Minimum value) | 2500 | | | | | | 6000 | | Quartile (1 - First quartile - 25th percentile) | 3750 | | | | | | 7000 | | Quartile (2 - Median value - 50th percentile) | 5500 | | | | | | 8000 | | Quartile (3 - Third quartile - 75th percentile) | 7250 | | | | | | 9000 | | Quartile (4 - Maximum value) | 8500 | | | | | | 10000 | | Percentiles | 4400 | | | | | | | | Correlation Coefficient | 0.990495 | | | | | | | | Max | 8500 | | | | | | | | Min | 2500 | | | | | | | | Range | 6000 | | | | | | | | Variance coefficient | 18.18% | | | | | |

Correlation coefficients can range from –1 to +1. A value of –1 represents a perfect negative correlation and a value of +1 represents a perfect positive correlation. If a data set has a correlation coefficient of zero there is no correlation between the variables. In our case, the correlation coefficient is 0.99 which means there is an almost perfect correlation between the ±3 staaandard deviations of the mean and the values of the profit (£).

Z-scores:Another use of the standard deviation is to convert data to a standard score or z-score. The z-score indicates the number of standard deviations a raw score deviates from the mean of the data set and in which direction, the following formula allows a raw score, x, from a data set to be converted to its equivalent standard value, z, in a new data set with a mean(m) of zero and a standard deviation(s) of one. z=x-ms In our situation, the z-score reflects the exact number of standard deviations we added/decreased from the mean ( -3,-2,-1,1,2,3).
The maximum value of profit within three standard deviations of the mean is 8500 £ while the minimum value is 2500 £.

2.4 Explain briefly the importance of quartiles, percentiles and the correlation coefficient and as a tool for business decision making |
In descriptive statistics, the quartiles of a ranked set of data values are the three points that divide the data set into four equal groups, each group comprising a quarter of the data.
Quartiles often are used in sales and survey data to divide populations into groups.

* 0 quartile represents the minimum value * first quartile also called the lower quartile or the 25th percentile (splits off the lowest 25% of data from the highest 75%) * second quartile also called the median or the 50th percentile (cuts data set in half) * third quartile also called the upper quartile or the 75th percentile (splits off the highest 25% of data from the lowest 75%) * fourth quartile represents the maximum value

For example, in our case you can use QUARTILE to find the top 25 % of profit (£) which is 3750 £.

The percentile function returns the same result as the quartile function. The first quartile is the same as the 25th percentile, the median is the same as the 50th percentile, and the third quartile is the same as the 75th percentile.
The K-th Percentile is that number such that K % of all data values are less and (100 - K) % are larger than it, or to be more precise, at least K% of the sorted values are less than or equal to it and at least (100 - K) % of the values are greater than or equal to it.In addition percentile allows you to know how one particular data value compares to the rest of the data.In our case we can go and ask for the 38% percentile from the values and like in our case it will reveal the value 4400 £.

The correlation coefficient (in our case 0.99) is the measure of the linear correlation between two variables X (age) and Y (money spent) giving values of in between +1 and -1 inclusive where -1 represents total negative correlation and 1 total positive correlation whilst 0 represents no correlation.

Task 3 (LO3: 3.1, 3.2, 3.3) 3.1 The following sales figures were extracted from ABC Ltd annual accounts from the period 2002-2006. You have been asked to use spreadsheet software technique to draw multiple bar charts and provide comments on the figures provided on the graph. ( See Annexes - PowerPoint presentation).3.2 You are given the following forecast data relating to ABC Ltd monthly sales and delivery cost. You are being asked to establish delivery cost against sales to examine the way in which delivery cost changed with sales revenue by using trend lines graph. This information will assist to establish the relationship between delivery cost and sales revenue in future. |

Months | Budgeted Sales (£'000s) | Delivery Cost £ | Sales revenue £'000s | July | 50 | 340 | 49.66 | | August | 150 | 400 | 149.6 | | September | 550 | 700 | 549.3 | | October | 560 | 650 | 559.35 | | November | 650 | 760 | 649.24 | | December | 710 | 750 | 709.25 | | January | 750 | 800 | 749.2 | | February | 900 | 900 | 899.1 | | March | 470 | 600 | 469.4 | | April | 350 | 450 | 349.55 | | May | 250 | 500 | 249.5 | | June | 80 | 330 | 79.67 | |

As we can see from the line graphic above, between delivery cost and sales revenue there is a direct proportionality. This could mean that certain products are very convenient even though their delivery costs are higher, the sales revenue will compensate.

3.3 In addition to the above information, you are also provided with the ACTUAL sales figures for the same periods. You are required to present this information on trends lines graphs to show the relationship between budget sales, actual sales and delivery costs.

Months | Budgeted Sales (£'000s) | Delivery Cost £ | Actual sales(£'000s) | July | 50 | 340 | 70 | August | 150 | 400 | 120 | September | 550 | 700 | 600 | October | 560 | 650 | 560 | November | 650 | 760 | 600 | December | 710 | 750 | 740 | January | 750 | 800 | 720 | February | 900 | 900 | 800 | March | 470 | 600 | 550 | April | 350 | 450 | 450 | May | 250 | 500 | 240 | June | 80 | 330 | 100 |

Looking at the line graph above where I’ve represented delivery cost against budgeted sales (blue) and against actual sales (red), we can see that the delivery cost is direct proportional with both budgeted and actual sales. The trend lines of the two sales types are very similar.

3.4 Produce a formal business report. Use the above sales and delivery cost information provided in task 3.3 above, and present a brief formal business report to your line manager, Operations and Business Development Director, and identify 4 key points you observed on the graphs or the table. You should also calculate and highlight in your report the arithmetic mean, median and mode for budgeted and actual sales as well as delivery cost. | Months | Budgeted Sales (£'000s) | Delivery Cost £ | Actual sales(£'000s) | July | 50 | 340 | 70 | August | 150 | 400 | 120 | September | 550 | 700 | 600 | October | 560 | 650 | 560 | November | 650 | 760 | 600 | December | 710 | 750 | 740 | January | 750 | 800 | 720 | February | 900 | 900 | 800 | March | 470 | 600 | 550 | April | 350 | 450 | 450 | May | 250 | 500 | 240 | June | 80 | 330 | 100 | Average mean | 455.8333333 | 598.3333 | 462.5 | Median | 510 | 625 | 555 | Mode | #N/A | #N/A | 600 |

Business report
Budgeted sales :Analysing the table above we see that the mean amount of £ is 455.833 and the median is £ 510. The data series has no mode, which means all of the values are different.
Delivery cost: In this series, the mean value is £ 598.33(31.26% higher than the budgeted sales mean) and the median one is £ 625 (22.55% higher than budgeted sales median). We don’t have a mode value.
Actual sales: The mean value in this case is £462.5 (1,46 % higher than budgeted sales mean) and the median £555(8.82% higher than budgeted sales median). The mode value is £ 600 which represents the most common value in the series.

Looking at the line graph above where I’ve represented delivery cost against budgeted sales (blue) and against actual sales (red), we can see that the delivery cost is direct proportional with both budgeted and actual sales. The trend lines of the two sales types are very similar (with mean difference of 1,46 % and meadian of 8.82%). In conclusion the estimated budgeted sales are very close to reality, as they are very similar to the actual sales.
The most important conclusions: * budgeted sales very similar to actual sales * direct proportionality between budgeted sales and delivery costs * direct proportionality between actual sales and delivery costs * more expensive delivery costs returns higher sales revenue
Task 4 (LO4: 4.1, 4.2, 4.3)
4.1 (a) I identify, and discuss at least the four qualities of management information should have whether at operational, tactical or strategic levels for decision-making within an organisation.
(b) Information systems design to support decision making within an organisation can be classified under operational, tactical and strategic levels. Explain with examples the following information systems, which are designed to support decision-making at operational, tactical and strategic levels:
i. Transaction processing systems (TPS) ii. Management Information Systems (MIS) iii. Decision Support Systems (DSS) iv. Executive Information Systems (EIS)

(a)
For information to be useful to the decision maker, it must have certain characteristics and meet certain criteria.
Some of the characteristics of good information are discussed as follow i. Understandable:
Since information is already in a summarized form, it must be understood by the receiver so that he will interpret it correctly. He must be able to decode any abbreviations, shorthand notations or any other acronyms contained in the information. ii. Relevant:
Information is good only if it is relevant. This means that it should be pertinent and meaningful to the decision maker and should be in his area of responsibility. iii. Complete:
It should contain all the facts that are necessary for the decision maker to satisfactorily solve the problem at hand using such information. Nothing important should be left out. Although information cannot always be complete, every reasonable effort should be made to obtain it.

iv. Available:
Information may be useless if it is not readily accessible ‘ in the desired form, when it is needed. Advances in technology have made information more accessible today than ever before.
v. Reliable:
The information should be counted on to be trustworthy. It should be accurate, consistent with facts and verifiable. Inadequate or incorrect information generally leads to decisions of poor quality. For example, sales figures that have not been adjusted for returns and refunds are not reliable. vi. Concise:
Too much information is a big burden on management and cannot be processed in time and accurately due to “bounded rationality”. Bounded rationality determines the limits of the thinking process which cannot sort out and process large amounts of information. Accordingly, information should be to the point and just enough – no more, no less. vii. Timely:
Information must be delivered at the right time and the right place to the right person. Premature information can become obsolete or be forgotten by the time it is actually needed.Similarly, some crucial decisions can be delayed because proper and necessary information is not available in time, resulting in missed opportunities. Accordingly the time gap between collection of data and the presentation of the proper information to the decision maker must be reduced as much as possible. viii. Cost-effective:

The information is not desirable if the solution is more costly than the problem. The cost of gathering data and processing it into information must be weighed against the benefits derived from using such information.
(b)

i. A transaction process system (TPS) is an information processing system for business transactions involving the collection, modification and retrieval of all transaction data. Characteristics of a TPS include performance, reliability and consistency.
TPS is also known as transaction processing or real-time processing.
For example, in the case of a bank account, a TPS keeps track of all the events associated with a single account: deposits, withdrawals, transfers, fees, interest paid, etc. This provides a good description of the account activity.

Typically, a TPS will exhibit the following characteristics:

Rapid Processing

The rapid processing of transactions is vital to the success of any enterprise – now more than ever, in the face of advancing technology and customer demand for immediate action. TPS systems are designed to process transactions virtually instantly to ensure that customer data is available to the processes that require it.

Reliability

Similarly, customers will not tolerate mistakes. TPS systems must be designed to ensure that not only do transactions never slip past the net, but that the systems themselves remain operational permanently. TPS systems are therefore designed to incorporate comprehensive safeguards and disaster recovery systems. These measures keep the failure rate well within tolerance levels.

Standardisation

Transactions must be processed in the same way each time to maximise efficiency. To ensure this, TPS interfaces are designed to acquire identical data for each transaction, regardless of the customer.

Controlled Access

Since TPS systems can be such a powerful business tool, access must be restricted to only those employees who require their use. Restricted access to the system ensures that employees who lack the skills and ability to control it cannot influence the transaction process.

Transactions Processing Qualifiers

In order to qualify as a TPS, transactions made by the system must pass the ACID test. The ACID tests refers to the following four prerequisites:

Atomicity

Atomicity means that a transaction is either completed in full or not at all. For example, if funds are transferred from one account to another, this only counts as a bone fide transaction if both the withdrawal and deposit take place. If one account is debited and the other is not credited, it does not qualify as a transaction. TPS systems ensure that transactions take place in their entirety.

Consistency

TPS systems exist within a set of operating rules (or integrity constraints). If an integrity constraint states that all transactions in a database must have a positive value, any transaction with a negative value would be refused.

Isolation

Transactions must appear to take place in isolation. For example, when a fund transfer is made between two accounts the debiting of one and the crediting of another must appear to take place simultaneously. The funds cannot be credited to an account before they are debited from another.

Durability

Once transactions are completed they cannot be undone. To ensure that this is the case even if the TPS suffers failure, a log will be created to document all completed transactions.

These four conditions ensure that TPS systems carry out their transactions in a methodical, standardised and reliable manner.

ii. MIS (Management Information Systems) is the hardware and software systems within an enterprise that provide the information that management needs to run an enterprise.
Management Information Systems is used broadly in various contexts and includes but is not limited to: decision support systems, resource and people management applications, project management, and database retrieval applications. Although the boundaries have become fuzzy over the years, typically MIS still covers systems that are critical to the company's ability to survive, including accounting and order entry. Upper management should not lose sight of this fact. In many businesses, MIS handles legacy software and hardware, coded by programmers long since retired, who left no documentation for the systems. The enterprise upgrades or modernizes these systems only very carefully, and with high appreciation of the risks involved. Therefore, MIS, and the people who support it and know its quirks, remains a vital if under-celebrated part of enterprise IT.

iii. A decision support system (DSS) is a computer program application that analyzes business data and presents it so that users can make business decisions more easily. It is an "informational application" (to distinguish it from an "operational application" that collects the data in the course of normal business operation).Typical information that a decision support application might gather and present would be: * Comparative sales figures between one week and the next * Projected revenue figures based on new product sales assumptions * The consequences of different decision alternatives, given past experience in a context that is described
A decision support system may present information graphically and may include an expert system or artificial intelligence (AI). It may be aimed at business executives or some other group of knowledge workers. iv.An executive information system (EIS) is a decision support system (DSS) used to assist senior executives in the decision-making process. It does this by providing easy access to important data needed to achieve strategic goals in an organization. An EIS normally features graphical displays on an easy-to-use interface.

Executive information systems can be used in many different types of organizations to monitor enterprise performance as well as to identify opportunities and problems.Early executive information systems were developed as computer-based programs on mainframe computers to provide a company’s description, sales performance and/or market research data for senior executives. However, senior executives were not all computer literate or confident. Moreover, EIS data was only supporting executive-level decisions but not necessarily supporting the entire company or enterprise.
Current EIS data is available company- or enterprise-wide, facilitated by personal computers and workstations on local area networks (LANs). Employees can access company data to help decision-making in their individual workplaces, departments, divisions, etc.. This allows employees to provide pertinent information and ideas both above and below their company level.
The typical EIS has four components: hardware, software, user interface and telecommunication.
4.2 (a) Discuss briefly the use of the following tools used in project management:
i. Critical Path Analysis ii. Gant Charts iii. Pert (Project Evaluation Review Techniques) Chart

i. Critical Path Analysis
Critical Path Analysis and PERT are powerful tools that help you to schedule and manage complex projects.Also called the "critical path method", critical path analysis can help predict whether a project can be completed on time and can be used to reorganize the project both before starting it, and as it progresses, to keep the project's completion on track and ensure that deliverables are ready on time.
Uses of CPA : * Estimate and minimize project time * Support project costing and evaluation * Plan and organize resources * Prioritise tasks * Help provide direction

ii. A Gantt chart, commonly used in project management, is one of the most popular and useful ways of showing activities (tasks or events) displayed against time. On the left of the chart is a list of the activities and along the top is a suitable time scale. Each activity is represented by a bar; the position and length of the bar reflects the start date, duration and end date of the activity. This allows you to see at a glance: * What the various activities are * When each activity begins and ends * How long each activity is scheduled to last * Where activities overlap with other activities, and by how much * The start and end date of the whole project
To summarize, a Gantt chart shows you what has to be done (the activities) and when (the schedule). iii.A PERT chart is a project management tool used to schedule, organize, and coordinate tasks within a project.
PERT planning has the uses that are described below:
1. Identify the specific activities and milestones. The activities are the tasks required to complete a project. The milestones are the events marking the beginning and the end of one or more activities. It is helpful to list the tasks in a table that in later steps can be expanded to include information on sequence and duration.
2. Determine the proper sequence of the activities. This step may be combined with the activity identification step since the activity sequence is evident for some tasks. Other tasks may require more analysis to determine the exact order in which they must be performed.
3. Construct a network diagram. Using the activity sequence information, a network diagram can be drawn showing the sequence of the serial and parallel activities. Each activity represents a node in the network, and the arrows represent the relation between activities. Software packages simplify this step by automatically converting tabular activity information into a network diagram.
4. Estimate the time required for each activity. Weeks are a commonly used unit of time for activity completion, but any consistent unit of time can be used. A distinguishing feature of PERT is its ability to deal with uncertainty in activity completion time.

4.2 (b) The following project data in the dependency table was provided by ABC Ltd IT manager; it relates to a new ICT project to be undertaken.

(i) To draw the network flow diagram.

Activity | Duration (days) | Preceding Avtivities | A | 4 | | B | 7 | A | C | 7 | A | D | 6 | A | E | 2 | C | F | 5 | C | G | 9 | C | H | 6 | B,E | J | 6 | D,F | K | 9 | H,G,J |

1D 10 10
1D 10 10

6
6
9
9

6

6

9
9
1B 11 11 11111111
1B 11 11 11111111
7
7
1K 31 31
1K 31 31
1J 22 22
1J 22 22
1H 19 19
1H 19 19
A 4 4
A 4 4

6
6

7
7
1E 13 13
1E 13 13
1C 11 11
1C 11 11

6
6

2
2

9
9

5
5
F 16 16
F 16 16

9
9

1G 20 20
1G 20 20

ii.Critical path
The critical path is A-B-C-E-F-H-J-K with a minimum duration of 31 d

iii.Gant chart

The minium duration of the project is 31 days (19th December to 30th January).

4.3 At the beginning of the year 2014, ABC Ltd board of directors are considering making investment decisions in ONE of the two new products, A, & B to be developed from next year 2015. The Accounts Department has provided the following data and relevant information to assist you, and using relevant financial tools, as stated below, to help the board make the right investment decision.
Barclays Bank has agreed to lend ABC Ltd initial investment of £20,000 for a 5-year period for the development of either Products A or B. The interest rate to be charged on the loan is 8%.
The forecast cash flows for the 5-year period provided by accounts department is as follows:

(a) The Net Present Value (NPV) for products A & B and recommend to the board which product to invest in.

| Product A | | | | | Product B | | Discount factor @ 8% | Cash(Outflows/inflows) | Present value (£) | | Year | Discount factor @ 8% | Cash(Outflows/inflows) | Present value (£) | | £ | | | | | £ | | 1 | -20000 | -20000 | | 2015 | 1 | -20000 | -20000 | 0.926 | 7000 | 6481 | | 2015 | 0.926 | 8500 | 7870 | 0.857 | 8500 | 7287 | | 2016 | 0.857 | 8900 | 7630 | 0.794 | 9800 | 7780 | | 2017 | 0.794 | 9600 | 7621 | 0.735 | 9500 | 6983 | | 2018 | 0.735 | 9700 | 7130 | 0.681 | 15500 | 10549 | | 2019 | 0.681 | 13500 | 9188 | | NPV | 19080 | | | | NPV | 19439 |

The board should invest in Product B because, it gives higher NPV (£19,439) compared to Product A, which gives £19,080. | |
(b) Internal Rate of Return (IRR) for products A&B and recommend the board which product to invest in. | Product A | | | | | Product B | | Discount factor @ 8% | Cash(Outflows/inflows) | Present value (£) | | Year | Discount factor @ 8% | Cash(Outflows/inflows) | Present value (£) | | £ | | | | | £ | | 1 | -20000 | -20000 | | 2015 | 1 | -20000 | -20000 | 0.926 | 7000 | 6481 | | 2015 | 0.926 | 8500 | 7870 | 0.857 | 8500 | 7287 | | 2016 | 0.857 | 8900 | 7630 | 0.794 | 9800 | 7780 | | 2017 | 0.794 | 9600 | 7621 | 0.735 | 9500 | 6983 | | 2018 | 0.735 | 9700 | 7130 | 0.681 | 15500 | 10549 | | 2019 | 0.681 | 13500 | 9188 | | IRR | 25.34% | | | | IRR | 27.42% |

The board should invest in product B because it’s IRR is 27.42 %,which is bigger than the IRR of product A 25.34 %.

Annexes

Bibliography 1. http://www.excel-easy.com/examples/frequency-distribution.html 2. http://www4.uwsp.edu/psych/stat/3/frqdist.htm 3. https://statistics.laerd.com/statistical-guides/standard-score.php 4. http://en.wikipedia.org/wiki/Sales_variance 5. http://www.yourarticlelibrary.com/management/8-characteristics-of-good-management-information-systems-explained/3483/ 6. http://www.bestpricecomputers.co.uk/glossary/transaction-processing-systems.htm 7. http://searchdatacenter.techtarget.com/definition/MIS 8. http://searchcio.techtarget.com/definition/decision-support-system 9. http://www.techopedia.com/definition/1016/executive-information-system-eis 10. http://www.slideshare.net/tutor2u/critical-path-analysis-10762045 11. http://www.gantt.com/ 12. http://um.ase.ro/no5S/1.pdf 13. https://teamgantt.com/gantt/schedule/?ids=308222#&ids=308222&user=&custom=&company=&hide_completed=false&date_filter=