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BDM
Introduction:.................................................................................................................. 2
Task 1.......................................................................................................................... 3
1.1
Create a plan for the collection of primary and secondary data for a given business
problem................................................................................................................. 3
1.2 Present the survey methodology and sampling frame used......................................6
1.3 Design a questionnaire for a given business problem............................................11
Task 2........................................................................................................................ 15
2.1 Create information for decision making by summarizing data using representative
values.................................................................................................................. 15
2.2 Analyse the results to draw valid conclusions in a business context.........................17
2.3 Analyse data using measures of dispersion to inform a given business scenario........18
2.4 Explain how quartiles, percentiles and the correlation coefficient are used to draw useful
conclusions in a business context............................................................................19
Task 3........................................................................................................................ 21
3.1 Produce graphs using spreadsheets and draw valid conclusions based on the
information derived................................................................................................ 21
3.2 Create trend lines in spreadsheet graphs to assist in forecasting for specified business
information........................................................................................................... 24
3.4 Produce a formal business report.......................................................................25
Task 4........................................................................................................................ 26
4.1 Use appropriate information processing tools.......................................................26
4.2 Prepare a project plan for an activity and determine the critical path........................28
4.3 Use financial tools for decision making................................................................31
Introduction:
In business, making good decisions requires the effective use of information. Business
Decision Making provides the opportunity of learning a variety of sources and develops
techniques in four aspects of information: data gathering, data storage, tools available
to create useful information and presenting. (Lawley, 2009)
Moreover, using appropriate IT software and spreadsheets for data analysis and the
preparation of information provides the advantages of using information systems which
is currently used at all levels in every organization.
Importance of business decision making
Decision-making is a vital part of the business world. Even a low-level supervisor makes
several decisions in a work day, and with some companies, decision-making is
encouraged among workers on the line.
History of the organization
The company I have chosen for my report is Marks & Spencer. Marks and Spencer,
originally known as Penny Bazaars, was founded by Michael Marks in 1884 as a
clothing sales company in Northern England. Thomas Spencer joined Michael Marks
ten years after its startup, becoming co-owner of the company. The company has
continued to work under the name of Marks & Spencer (M&S) since 1894.It became a
phenomenon, first in its country of origin, the UK, and later internationally. American
chain stores influenced M&S to start selling both food and clothes in the 1920s. The
company saw itself grow from 1894 to 1939, by opening a staggering 234 stores. M&S
worked in close cooperation with its suppliers and made strategies for the use of new
technologies which in turn led to the highest quality in its products. The company had
future foresight thus adding internationalization and product diversification to its strategy
in the late 80s. Over the years it took over its competitors, as a major retailer selling
diverse product ranges under their own exclusive brand in more than 30 countries.
Marks and Spencer can be proud of leading the race over all its major competitors in
the key areas of quantity, quality, and trust, breadth of range and customer service.
(Rogers, 2008)
2
Task 1
1.1 Create a plan for the collection of primary and secondary data for a given
business problem
The primary method of data collection is the most original and authentic method of data
collection. Primary data is actually unvarnished data that have never been manipulated
before. Therefore, primary data are preferred in any research. Primary data increases
the reliability and authenticity of research and in most of the scientific researches
primary data are used. (Cagan, M, 2008)
Primary methods of data collection
There are different types of primary data and they are used according to the type of
study. Some of the most prominently used methods of primary data collection include
observation, interview, questionnaire and experiments. There are many other methods
but they are less recognized compared to the above mentioned methods.
Observation is the most commonly used method of data collection in the humanities
and social sciences.
awareness of the participants even, if the participants are aware or not aware of the
observation the observer should understand the ethics of the privacy of the participants.
(Abrahamson, 1996)
Interviews are another important method of primary data collection. Interviews are
expensive as compared to other methods of data collection. In the interview the
interviewer collects information from each respondent independently. Interviews are
more reliable as compared to observation.
The questionnaire is one of the most commonly used methods of data collection in
research. Questionnaires are formulated to get to the point information on any subject
area. The questionnaire is an inexpensive method of data collection as compared to
other methods of primary research. Questionnaires can be submitted by the vast
audience at a time and the responses can be obtained easily. (Lawley, 2009)
Experiments are the most reliable source of data collection in natural sciences.
Experiments can be conducted in any area of scientific study, whether it is chemistry,
biology, physiology, physics, astronomy or mathematics. Experiments can be conducted
in a controlled environment as well as in natural situations.
Experiments can be
Source: www.googleimage.com
Probability Sampling Uses randomization and takes steps to ensure all members of
a population have a chance of being selected. There are several variations on this type
of sampling and following is a list of ways probability sampling may occur: (Selden,
1998)
Random sampling every member has an equal chance
Stratified sampling population divided into subgroups (strata) and members are
randomly selected from each group
Systematic sampling uses a specific system to select members such as every
10th person on an alphabetized list
Cluster random sampling divides the population into clusters, clusters are randomly
selected and all members of the cluster selected are sampled
Multi-stage random sampling a combination of one or more of the above methods
Non-probability Sampling Does not rely on the use of randomization techniques to
select members. This is typically done in studies where randomization is not possible in
order to obtain a representative sample. Bias is more of a concern with this type of
sampling. The different types of non-probability sampling are as follows:
Convenience or accidental sampling members or units are selected based on
availability
Purposive sampling members of a particular group are purposefully sought after
Modal instance sampling members or units are the most common within a defined
group and therefore are sought after
Expert sampling members considered to be of high quality are chosen for participation
Proportional and non-proportional quota sampling members are sampled until exact
proportions of certain types of data are obtained or until sufficient data in different
categories is collected
Diversity sampling members are selected intentionally across the possible types of
responses to capture all possibilities
Snowball sampling members are sampled and then asked to help identify other
members to sample and this process continues until enough samples are collected
Advantages and disadvantages of random sampling
Advantages:
Can be used with large sample populations
Avoids bias
Disadvantages:
Can lead to poor representation of the overall parent population or area if large areas
are not hit by the random numbers generated. This is made worse if the study area is
very large
There may be practical constraints in terms of time available and access to certain parts
of the study area
Advantages and disadvantages of systematic sampling
Advantages:
It is more straight-forward than random sampling
A grid doesn't necessarily have to be used, sampling just has to be at uniform intervals
Disadvantages:
It is more biased, as not all members or points have an equal chance of being selected
It may therefore lead to over or under representation of a particular pattern
Advantages and disadvantages of stratified sampling
Advantages:
It can be used with random or systematic sampling, and with point, line or area
techniques
It is very flexible and applicable to many geographical enquiries
Correlations and comparisons can be made between sub-sets
Disadvantages:
The proportions of the sub-sets must be known and accurate if it is to work properly
It can be hard to stratify questionnaire data collection, accurate up to date population
data may not be available and it may be hard to identify people's age or social
background effectively
Quantitative research: Provides Quantitative research is a method which involves
collecting numerical data (which is analysed at a later stage) in order to test a particular
Questionnaires
2.
Surveys, and
3.
Structured interviews.
The best example of quantitative method of M&S is questioner that means numerical
data will be used like calculation etc. whereas qualitative method in which data cannot
be calculated the best example is interviews. In this research I used both the method
questioner and interviews. I shall prepare the questions like about the choice and
likeness of the M&S firm in UK market. (Lawley, 2009)
For this business problem both survey methodology and sampling method both are
important in decision making. We have selected target customer from Greater Lon
Open-ended questions are asked to get the comprehensive information on any
particular topic, attitude, opinions and facts don. For this case we have collected
information which are systematic sampling, stratified sampling, quota sampling, simple
random sampling, cluster sampling for accurate result in this research. For this M&S
company personal interview, telephone interview, electronic interviews, open-ended
question, structured interview, unstructured interview (Healey and Rawlinson 1993,
1994).
M&S is very famous company in United Kingdom for its better service,
reasonable price, goodwill. Their profit margin is also high but recently they are facing
downward profit margin for lack of up to date customer services and knowledge about
the pattern of behavior.
10
Disagree
11
Strongly
agree
Not applicable
7. I am likely to
recommend the
product to others.
8. Are there any
improvements that
you feel we could
make to the product?
Primary sources
Survey methodology
Survey methodology studies the sampling of individual units from a population and the
associated survey data collection techniques s, such as questionnaire construction and
methods for improving the number and accuracy of responses to surveys ((Rogers,
2008). There are different types survey methodology that can be used for the given
business problems such as a suggestion for this company are personal interview,
telephone interview, electronic interviews, open-ended question, structured interview,
unstructured interview ( Healey and Rawlinson 1993, 1994)
Telephone
Mail (post)
Online surveys
Personal in-home surveys
Personal mall or street intercept survey
Hybrids of the above.
Cross-sectional and longitudinal surveys
Cross-sectional survey which involves a single questionnaire or interview administered
to each sample member, and surveys which repeatedly collect information from the
12
same people over time. Longitudinal surveys have considerable analytical advantage.
(Haines, 2008)
Sampling frame
A sampling frame is the source material or device from which a sample is drawn. It is a
list of all those within a population who can be sampled, and may include individuals,
households or institutions.
Sampling methods
Sampling methods are classified as either probability or non probability. In probability
samples, each member of the population has a known non-zero probability of being
selected. Probability methods include random sampling, systematic sampling, and
stratified sampling. In non probability sampling, members are selected from the
population in some nonrandom manner. These include convenience sampling, judgment
sampling, quota sampling, and snowball sampling. (Selden, 1998)
Sampling error
sampling
error
In
statistics, sampling
error is
by
observing
a sampleinstead of the whole population. The sampling error is the difference between
a sample statistic used to estimate a population parameter and the actual but unknown
value of the parameter (Bunns & Grove, 2009).
Secondary data
Secondary data refers to the information that has already been collected for other
purposes and thus readily available. Secondary data can be collected from two different
sources.
Internal data sources:
Sales by country
Sales by products
13
Sales by volume
Pricing information
Sales representatives
Use of ID Cards
data protection issues; Data Act of 1998
Ethical issues: confidentiality of respondents, organisations that the data have been
obtained from, secrecy etc must be kept
Task 2
2.1 Create information for decision making by summarizing data using
representative values
Mean is the total sum of the observations divided by the number of observations.
Mode is an average that indicates the most frequent occurring value
Median is the value of the middle member of distribution once all the items have been
arranged in order of magnitude.
Range: The range is the difference between the largest and smallest observation in the
set of data. Suppose highest value is 12 and lowest value is 1 then range
Range= (20-5)
Average spent
Mid-
House
House
in house hold
Point
Holds
Holds
(x)
(f)
(fx)
0 < 100
50
12
600
101< 200
151
753
201< 300
251
251
351
701
451
451
15
501+
0
2754
Then X =
=2754.5
20
Based on my observations it clearly shows that the average spending in households at
M&S on a weekly, quarterly or monthly basis is 0-100. This suggests that it may not
be affordable as the prices might be too high so it restricts how much consumers spend
on average for example some explanations given by customers were I am in part-time
work, my income is low etc. The products needed may not be available so they end up
buying only what is. I will suggest to management of M&S could carry out a survey to
gather information to see products that are most needed or products bought and make
this more available for customers. Management can also monitor the products more
closely so products are in the right place at the right time. M&S needs to also consider
what customers they attract for example the age group, working or non-working class,
or the ones only seeking bargains at a particular times(Selden, 1998). Looking at the
results the people surveyed at M&S is living within the means of approximately about
138 from weekly to monthly on average.
The median of group data
Average spent
Mid-
(fx)
CF
In house hold
Point
Household
(x)
(f)
1 < 100
50
12
600
12
151
753
17
251
251
18
351
701
20
16
451
451
21
2756
21
501 >
Class Interval
FX
(x - xx )
(x - xx )
f(x - xx )
20 - 30
25
15
375
-10
100
1500
30 - 40
35
20
700
40 - 50
45
225
10
100
500
50 - 60
55
275
20
200
1000
45
1575
Mean = xx = = = 35
Variance = = = 66.67
17
3000
This business decision represented the value of mean, median and mode for making
the valid conclusion for the goods or services. The standard deviation of this data
analysis was used in the case of measuring the dispersion. The business values were
dependent upon this range of techniques in order to analyze the business data
effectively.
Looking at the results obtained above M&S can use these as a guideline into how they
position products into the market.
coming into their stores by thinking about the quality of their products in the market.
They need to consider the needs of customers coming into their stores by thinking
about the quality of products they bring into the stores, the types of products and how
they price these/their products because pricing products too high can make products
unaffordable to customers pushing them to go to a different stores for example
Poundland or Asda where the products are cheaper, creating losses for them, products
needed may not be available to them pushing them to also go elsewhere. M&S can
also make good use of results to categorise or target their customers for example M&S
offers loyalty/store cards to customers, they can check the spending habits of
consumers through this and they can bring in products that suits the needs of their
customers. (Haines, 2008).
A suitable survey methodology in terms of population, sample and sampling methods
that could be used to collect the M&S Company employee salary, wages about their
opinions on the different range available on the market is the different types of sampling
methods, which are used to gathering information about employees. The alternative
would be to test, measure or question every member of the employee, this might be
impractical because It could take too long, difficult to access all items in employee such
as their national insurance and tax contribution, its too expensive and total employee
size may be unknown.
18
Advantages of sampling; is that it saves time and money, and sometimes can be the
only option. Disadvantages are that sampling error, this is when sample is not
representative of total Companys expenditure, this bias can be computed and
analysed. Non sampling errors, this is when missing data, defective questionnaires etc,
these cannot be computed and analysed so sampling must be planned and carried out
well.
Variation is the amount of dispersion in the data. Actually the variation among the
values in a population or sample is the measures of dispersion and for measuring the
dispersion ( A k Ajad, 1998) ) the range, mean deviation, standard deviation, variance
are used. So dispersion means the values distance from the mean value .
In statistics, the standard deviation (SD, also represented by the Greek letter
sigma or s) is a measure that is used to quantify the amount of variation
or dispersion of a set of data values. A standard deviation close to 0 indicates that the
data points tend to be very close to the mean (also called the expected value) of the set,
while a high standard deviation indicates that the data points are spread out over a
wider range of values.
Range: The range is the difference between the largest and smallest observation in the
set of data. Suppose highest value is 12 and lowest value is 1 then range
Range= (20-5)
Mean Deviation: Mean deviation (MD) =()/
The sample standard deviation is the square root of sum of the squires differences
around the arithmetic mean divided by the sample size minus one.
Standard deviation, S= ()/
19
Project name
Range
Mean deviation
Standard
deviation
M&S
12-1
5.30
3.75
Mean absolute deviation tells about the standard value of the divergences among the
absolute value and the values of particular individual which is come from the data array.
Actually there is dispersion method from which can be measured accurate result for the
given business problem but its somehow helpful to take decision. (Peppers and Rogers,
2008)
2.4 Explain how quartiles, percentiles and the correlation coefficient are used to
draw useful conclusions in a business context
Quartile: Quartile represents the middle value between two quarters of a distribution
(Dransfield, 2003). The lower quartile is the value between the first and second quarter
of the distribution. The upper quartile is the value between the third and fourth quarter
of the distribution. The middle quarter is called median.
Percentile: Percentiles are values that divide a sample of data into one hundred groups
containing equal numbers of observations. For example, 30% of the data values lie
below the 30th percentile (Easton and McColl, 2010).
Coefficient: the coefficient of variation measures the spread of a set of data as a
proportion of its mean. It is the ratio of the sample standard deviation to the sample
mean. It is often expressed as a percentage (Easton and McColl, 2010).
Variance and Standard Deviation- Variance measures how far the observations are
from the mean. This is more important statistics because it considers all the
observations and is used for further analysis. Standard deviation is the square root of
variance. Both variance and standard deviation provide useful information for decision
making and making comparisons. (Peppers and Rogers, 2008)
20
From the calculation range is 284 and quartile range is 170, but because of the
defects of them we cannot use them to derive further decisions. Variance is 8426.9 and
standard deviation is 91.79. Variance and Standard deviations are used to compare
two data sets. So the owner of this garage can compare these two figures with a similar
garage or the cost of November and make decisions such as select the price which has
smaller variance and standard deviation.
Quartiles and percentiles also like representative measure. They indicate the
percentage of value below a certain value i.e. 3rd quartile indicate 75% of the
observations are below a certain amount and 25% of observations are above.
Quartiles and percentile values of the garage
Quartiles- 1
248.5
322.5
418.5
Percentiles- 75%
418.5
50%
322.5
60%
349.4
From the above figures we can see only 25% of the values are above 418 so we
shouldn't charge a price above than that if we do so we will lose many of their
customers. 25% of the observations are above 248.5 so we have to select a price
between 248 and 418. Earlier we have found out the mean which is 335. This is
between 2nd quartile and 60% of percentile. So from the use of quartile and percentile
we can select 335 as the service price. Thus quartile and percentile help us in decision
making.
Correlation coefficient measures the strength of the linear relationship between two
variables. It is denoted by r. Value of r always lie between -1 and +1. If r is closer to
21
+1, two variables have strong positive relationship. Correlation and coefficient also
helps to make business decisions.
Task 3
3.1 Produce graphs using spreadsheets and draw valid conclusions based on the
information derived
Here we have used spreadsheets and drawn valid and reliable conclusion based on this
collected information for making decision in marketing to satisfy the customer. Here we
have shown some statistical survey results from some of the selected questionnaires as
below
1.Is
the
M&S
providing
quality
services
to
their
customer
25
20
15
10
5
0
From this analysis we can say that M&S is pretty renowned store in Greater London.
Because majority of the participants in this survey are positive minded, 49% is in favor
in this company. And 30% is disagreed so organization should be conscious, variation in
the pattern of their proving services and product quality.
2. Are the customers satisfied with M&S present services and product quality?
22
35
30
25
20
15
10
5
0
The analysis is threatening for the company as major retailers forced to change strategy
(Kantar Worldpanel UK, 2014). Here majority (55%) of the customer disagreed with the
current services strategy.
3.
Is
the
company
fulfilling
their
25
20
15
10
5
0
23
corporate
social
responsibilities?
From this analysis, M&S is fulfilling their corporate social responsibilities 44% as
customers are agreed. As this company is the 4th largest supermarket in UK so it has
many responsibilities to society.
4. Do you think that the marketing procedures are good of M&S?
30
25
20
15
10
5
0
Here in the above discussion, 45% public are just telling that the company has superior
insist in the competitive market. The company has to expand their marketing methods to
cultivate up their insistence in the competitive market (Hahn, 1999)
From the questionnaire we got information and after calculating we got specific
information that is shown in spreadsheet. Actually Spreadsheet is a computerized
system that has column and row where data are kept and graph is produced from that
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$0
M&S
Aldi
24
3.2 Create trend lines in spreadsheet graphs to assist in forecasting for specified
business information
Year
M& S
Lidl Ltd
Aldi
Sains bury's
The graphs above show that all four supermarkets have made significant profit.
However, due to the market of the discount retailers the two main ones Sainsbury and
Morrison even though profit is been made the margins have decreased.
Aldi however, is holding strong in the middle ground. They have made progress in the
year 2012-2013.
3.4 Produce a formal business report
Subject : The customer satisfaction and "Bike hut" awareness survey
To : The Management
From : The Market Research Team
25
Production has to
innovate appropriate cycle designs for females. Advertising team should attract feminine
market and promote "Bikehut" stores as well as Halfords products. (Abrahamson,
1996)
Task 4
4.1 Use appropriate information processing tools
Management information system (MIS) is a system that allows managers to make
decisions for the successful operation of businesses. Management information systems
consist of computer resources, people, and procedures used in the modern business
enterprise (Turban, Efraim, 2002). MIS also refers to the organization that develops and
maintains most or all of the computer systems in the enterprise so that managers can
26
make decisions. The goal of the MIS organization is to deliver information systems to
the various levels of managers: Strategic, Tactical and Operational levels.
Types of Information vary according to the levels of management.
Strategic management will need information for long term planning and corporate
strategy. This will be less structured.
Tactical Management needs to take short term decisions to focus on improving
profitability and performance.
Operational management needs information on day to day operations of the
organisation.
Success in life often depends on the choices we make. So business success mostly
depends on using appropriate information processing tools. It normally refers to the
information technology industry which involves in Information processing or data
processing including audios and videos, graphics and texts. There are discussed below
the tools used by the researchers in the given business problem. (By Edward Perry,
eHow Contributor, last updated September 01, 2014)
Database
A database is a basic tool used to process information and to manage and store data
efficiently. A database management system is software popularly used to store product
inventory and customer information. The companies have many dissimilar classes on
which data is amassed according to the customers name and rank.
Server
Servers are computer systems in networks. Different computers within a network can
share the files on a server. A PC can act as a server, and it can be an IBM mainframe.
"Server" may refer to the PC.
Search Engine
27
A search engine retrieves information from a collection of data like in a library catalog.
Today, the term more popularly refers to information processing tool that retrieves
queried data from the Internet's databases. (Abrahamson, 1996)
Accounting Information Systems
Accounting information systems is a subset of a management information system. AIS
play a vital role in internal management decision making by providing precise financial
accounts and appropriate statistical reports. (Turban, Efraim, 2002)
Enterprise Systems
Enterprise systems use common identifiers such as ANU and affiliate ID in their
applications to integrate data stored in any enterprise system with those stored in other
enterprise
systems.
28
It's hard to think of any complex business endeavor that was ever achieved without
organization & planning.
Project management is the organization, planning and control of projects.
2. Managing Risk
Any good project has plenty of risk. After all, the nature of business is taking risks.
Risk is a fundamental part of business strategy. However, risk needs to be managed.
Risk is that chance of a negative event or loss. Uncontrolled risk taking ends in asset
destruction and compliance issues.
Project management identifies, manages and controls risk.
3. Managing Quality
Quality is the value of what you produce. There's not much sense producing something
that has no value.
Leaving quality to chance is analogous to producing something of random value.
Project management identifies, manages and controls quality.
4. Managing Integration
Projects don't happen in a vacuum. They need to be integrated with business
processes, systems and organizations.
You can't build a sales system that doesn't integrate with your sales process and sales
organization. It wouldn't add much value. Integration is often key to project value.
29
5. Managing Change
Projects always happen in an environment in which nothing is constant except change.
Projects are always a moving target.
Managing change is a complex and daunting task. It's not optional. Unless you can put
your business universe on pause, change happens whether you manage it or not.
Project management manages change.
6. Clearing Issues
Business initiatives typically encounter regular issues that must be managed to achieve
objectives.
Project management plays a critical role in identifying and clearing issues.
This section shall contain, either directly or by reference, plans for the supporting
functions of the software project. Supporting functions include (but may not be limited
to):
Software quality assurance,
Verification and validation plans,
Production support and operational support functions.
Work Packages, Schedules, and Budget
The Gantt Chart shows the a project plan analysis dateline.
This section of the Project Management Plan will specify the work packages, identify the
dependency relationships among them, state the project resource requirements, provide
the allocation of budget and resources to work packages, and establish a project
schedule.
1 Work Packages
This subsection will define the work packages (work breakdown structure (WBS)) for the
activities and tasks that must be completed in order to satisfy the project agreement.
Each work package must be uniquely identified; identification may be based on a
numbering scheme and descriptive title. A diagram depicting the breakdown of activities
(Gantt Chart) may be used to depict a hierarchical relationship among work packages.
31
2 Dependencies
This section will state the ordering relations among work packages to account for
interdependencies among them and dependencies on external events. Techniques such
as dependency lists, activity networks, and the critical path method may be used to
depict dependencies among work packages.
3 Resource Requirements
Identifies, as a function of time, is estimated of total resources required to complete the
project. Numbers and types of personnel, computer time, hardware, software, office
facilities, travel, training, and maintenance requirements are typical resources that
should be specified.
4 Budget Requirements
Identifies, as a function of time, is estimated of total budget dollars required to complete
the project.
4.3 Use financial tools for decision making.
Different types financials tools are using in business decision making. Here are some
important and most usable financials tools used in decision making.
To evaluate a project in the main financial tool which use as a decision making
technique is calculated net present value (NPV) and internal rate of return (IRR).
Organisation invests in projects expecting an upright return in long time span. By using
NPV the management can decide the surplus or the shortage of the cash flow. IRR
calculation mainly considers about the discount rate only. The discount rate may change
over the time period. Therefore the IRR rate will also change accordingly. Using the
internal rate of return is not rational to evaluate a project.
Project A
Year
Cash Flow
Discounting Factor
32
Present Value
DF @ 10%
(000)
FV x DF (000)
(500)
1.000
(500)
100
0.909
90.90
200
1.736
347.2
400
2.487
994.8
300
3.170
951
200
3.791
758.2
+2642.1
ahead with the project by the first principle, the decision is that if NPV>0, then the
project is viable since the NPV=2642.1.
management of Morrison to go ahead with this project or not but if he/she decides to go
for NPV the time value of money is considered and there is a complete measure of
return. (NPV is positive so the project can go ahead as it is a profitable one)
NPV as a financial tool gives management time value of money, the years in which the
project will last, it informs shareholders if they are making money or not and it allows
managers to set higher discount rates for projects that are more risky. However, NPV
cant be easily explained to managers and the cost of capital is always required.
Project B
Year
Discounting Factor
Present Value
(000)
DF @ 10%
FV x DF (000)
(500)
1.000
(500)
50
0.909
45.45
33
150
1.736
260.4
300
2.487
746.1
400
3.170
1268
300
3.791
1137.3
+2957.25
500,000
Initial cost was 10% and the return is 28%. Since the returns of 28% exceeds the cost
of capital of 10% the project can be accepted.
Payback Method of Appraisal for Project A
Year
Cash Flow
Cumulative
(000)
Cash Flow
(000)
(500)
(500)
34
100
(400)
200
(200)
400
300
200
Cash Flow
(000)
(000)
(500)
(500)
50
(450)
150
(300)
300
400
300
Appendix 1:
Companys current situation
1. Who are your key customers and where are they (current and prospective)?
A. What are their problems, needs and wants
35
2. What benefit can your company provide these customers that they cant obtain
elsewhere?
3. Where are you now?
A. Where do you want to be in 1 year, 3 years, 5 years and beyond?
4. Why do you want to be there?
5. What problems must you overcome to get there?
6. What methods, tools and strategies are now being used to get there?
Client questionnaires
7. Who are your (key) competitors?
8. What is is your assessment of their apparent goals and strategies relative to
their product characteristics?
B. Pricing?
C. Distribution?
D. Service?
E. Communication with their customers and other publics?
F. Strengths?
G. Weaknesses?
9. Is there any current marketing research available?
Partnership and equipment related questionnaires:
10. Use three equipments to describe how the company should be perceived by the
audience.
36
12. What do you feel is the biggest challenge in getting this image across to
partnership?
13. How is your company currently perceived partnership relation? Do you wish to carry
the same kind of message through this?
Standard Deviation
The Standard Deviation is a measure of how spread out numbers are.
37
Then work out the average of those squared differences. (Why Square?)
References:
Abrahamson, E. (1996). "Managerial fashion." Academy of Management Review.
21(1):254-285. http://www.jstor.org/pss/258636
Aaron,S., (January 23, 2009). "Scrum Product Manager / Product Owner Roles and
Responsibilities".
PM
Hut.
http://www.pmhut.com/scrum-product-manager-product-
Thames Valley University (no date) Dissertation Guide [online] Thames Valley
University [cited 7th August 2010]. Available from
Trochim, W(2006) Research Method Knowledge Base [online] William MK Trochim cited
5th November, 2011
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