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Make Decisions On Business Issues: Submission Details
Make Decisions On Business Issues: Submission Details
Assessment site
The assessment task is due on the date specified by your assessor. Any variations to this
arrangement must be approved in writing by your assessor.
Submit this document with any required evidence attached. See specifications below for
details.
Performance objective
You will demonstrate the skills and knowledge required to make timely decisions on identified
business issues.
Assessment description
Using the simulated business information provided, and in response to a scenario, you will
utilise risk management 1 plans, sensitivity and quantitative analysis techniques and
consultation processes to determine acceptable courses of action and make a decision. The
decisions must be taken within organisational guidelines and be consistent with its values,
objectives and standards (i.e company ethics). A presentation will be made to CoffeeVille’s
managers detailing options available for potential courses of action and your recommendations.
Procedure
1. Read the scenario information provided under CoffeeVille – your brief in
Appendix 1.
2. Review CoffeeVille’s organisational chart in Appendix 1 to build an understanding of
the business’s reporting and command structure.
3. Review, evaluate and analyse information provided about each of the decision options
facing Coffeeville in Appendix 2.
1
Risk management - Risk management is the process of identifying, assessing and controlling threats
to an organization's capital and earnings.
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2
A business impact analysis (BIA) is the process of determining the criticality of business activities
and associated resource requirements to ensure operational resilience and continuity of operations during
and after a business disruption.
3
https://en.wikipedia.org/wiki/Sensitivity_analysis
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Specifications
You must submit:
● a fully completed Decision Analysis Report
● computer printouts or handwritten copies of the results gained from the statistical,
sensitivity and quantitative analysis techniques used to assist the decision-making
process – at least one set of results for each type of analysis technique must be attached
to the Decision Analysis Report
● force field analysis 4 diagrams for options 2 and 3 – please attach to the Decision
Analysis Report
● your responses to the questions in Appendix 5.
4
Force Field analysis - Force-field analysis is a development in social science. It provides a framework
for looking at the factors that influence a situation, originally social situations. It looks at forces that are
either driving movement toward a goal or blocking movement toward a goal.
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Appendix 1
CoffeeVille – Your brief
Rufus and Emma Belcastran, CoffeeVille’s owners, have approached you for assistance. The
business has been profitable and steadily expanding for the last 4 years. However, recently
expenses have started to climb and sales are dropping. In the last 3 months they have started to
address the issue of rising expenses by evaluating and updating procedures and work practices
in an effort to reduce costs. So far, their efforts have not had a significant impact on
expenditure and their sales revenue continues to be below budget forecasts.
It’s January 2016 and all four stores are closed for a summer break. Emma and Rufus are using
the downtime to assess their business’s operational and financial status in preparation for the
year ahead.
They have asked you to help them determine the best course of action and to assist in the
decision-making process.
There are three courses of action that could be taken:
1. Do nothing.
2. Reduce their prices.
3. Provide take-home packaged meals and a meal delivery system.
Initially, you plan to use statistical, sensitivity and quantitative analysis techniques to analyse
the impact of Options 2 and 3. The data and information provided in the appendices of
Assessments 1 and 2 as well as the results of any analysis processes completed in Assessment
2 may assist your analysis.
Organisational chart
Store Managers
Food service
Baristas Cooks
attendants
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Appendix 2
Analysis of decision options
Based on discussions with Emma and Rufus, and further research into economic and business
climates, you have prepared the following summary for the three options under consideration.
Your brief is to only investigate options 2 and 3 further, however, any information in the
summary for option 1 can be used when determining the most acceptable course of action.
1. Do nothing
Economic indicators and industry analysts forecast a more positive economic environment
within the next 12 months, with both business and consumer confidence growing.
Business and real estate analysts forecast CBD vacancy rates will drop to 9% within 12
months, and 8.5% within 18 months as local and international businesses absorb the current
glut of office space.
Aim:
● To maintain reputation as provider of quality food and beverages.
● When combined with rising expenses, profits are down for the first half of the financial
year by 19%.
● Payroll expenses have risen 10.5% over the last 6 years, 3.2% in the last 12 months.
Concerns:
● The current trend will continue, resulting in financial difficulties for the business and the
potential closure of non-profitable stores.
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● To increase the number of items sold per day by a minimum of 5% with a goal of 15%
across all food categories and hot beverages.
● To reduce total expenses to 75% of total income.
Questions:
● Number of sales required under the new pricing system to achieve current daily revenue
figures?
● Impact on revenue if increases in sales figures vary between the minimum (5%) and
maximum (15%) goals?
Breakfast
$6–$9 $7.50 76 $570 10%
options
Sandwiches
$8–$10 $9.50 96 $912 10%
bar wraps
Sweet baked
$4–$7 $4.50 45 $202.50 10%
goods
Milkshakes
and iced $6 $6 15 $90 0%
coffees
Packaged
$3–$5.50 $4.50 65 $292.50 5%
drinks
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Menu items for take-home meals will consist of chilled, fully prepared, heat-and-eat or finish-
at-home options. Three to four options will be offered every day, with the menu changing
daily, and will include at least one vegetarian and one salad option.
A limited delivery service for hot and cold meals will be offered to local residential buildings
based on the range of take-home menu items. These meals will be delivered hot (or cold for
salads), ready for immediate consumption/use.
Business hours of the stores will be extended from 4pm to 8pm.
All daily menu items will be prepared in bulk for all stores by the cooks in their current store
locations (stores 3 and 4). Prepared menu items are transported to other stores prior to 5pm
each day.
Aim:
● To expand the business into new markets.
● To enter the packaged take-home and residential market and establish their brand before
it becomes saturated/flooded with competitors.
● To meet the needs of the steadily increasing CBD residential population.
● Each store selling packaged meals will require a minimum of one counter attendant for
4.5 hours at $16.50 per hour.
● Each store offering home delivery would require a delivery driver at $17 per hour for
three hours.
Questions:
● Most cost-effective method of providing home delivery service to potential residential
destinations from all stores?
● Delivery costs if meals are delivered to all residential areas from stores 3 and 4 only?
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Delivery costs for home delivery service to targeted CBD and fringe residential areas
Res Ability to
Res Area 2 Res Area 3 Res Area 4
Area 1 supply
Store 1 $3 $4 $5 $4 30
Store 2 $4 $3 $5 $2 20
Store 3 $5 $5 $3 $3 75
Store 4 $4 $2 $6 $5 90
Potential demand 20 40 30 30
Ability to supply = holding capacity of each store, not how many menu items are stocked.
Delivery costs for home delivery service to targeted CBD and fringe residential areas
Store 3 $5 $5 $3 $3 75
Store 4 $4 $2 $6 $5 90
Potential demand 20 40 30 30
Cold
$9–$12 $10.50 30 $14–$18 $16 30
menu
Packaged
$3–$5.50 $4.50 20 $5–$8 $7 60
drinks
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Appendix 3
Risk management plans and business impact analysis
Selective discounting.
Adjustment to marketing strategy to ensure
differentiation and appropriate positioning
of CoffeeVille in order to compete
effectively.
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Changes to local L H M Limited ability to apply controls due to lack Monitor business and Quarterly Rufus Belcastran
economic environment w of ability to influence. economic Emma Belcastran
Apply pricing, payroll, inventory and environment in
wastage controls to limit impact on catchment area.
financial viability.
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Business risks 1 = high Revenue Costs Staff Penalties Liability Reputation / Timeframe for Length of
5 = low good will impact impact
Emergence of 3 loss $500– $500 pw Loss 1–2 NA NA NA Immediate Permanent
competitor $600 per marketing
day
Food poisoning 2 loss $500– $2,000+ Retaining Possible Possible High Immediate Minimum 6–
complaint $600 per costs fines court 12 months
day action
Changes to 3 loss $200– $100 pw Loss 1–2 NA NA NA 2–6 months Dependant on
local customer $300 per marketing + nature of
demographics day? menu change
changes?
Changes to 3 Unknown Unknown Loss 1–2 NA NA Medium due 2–12 months Unknown due
local economic assumption to changes in to lack of
environment higher food and control
service quality
Reduced 1 loss $100– Unknown Loss 1–2 NA NA Medium due 2–12 months Unknown due
profitability $600 per to changes in to lack of
due to day food and control
increasing service quality
expenses
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Appendix 4
City of Melbourne demographics
The following information are extracts from City of Melbourne Daily Population Estimates and
Forecasts 2015 Update report.5
Population overview
The number of city residents is forecast to grow at around 3.2% annually during the next 16 years (from
2015 on), with more than 202,000 people calling Melbourne home by 2030.
The number of workers is forecast to grow at around 2% annually during the next 16 years, with an
estimated 526,000 people travelling to work or undertake work-related activities in the city by 2030.
5
City of Melbourne, 2015, Daily Population Estimates and Forecasts, City of Melbourne, available online,
<https://www.melbourne.vic.gov.au/SiteCollectionDocuments/daily-population-estimates-and-forecasts-report-2015.pdf>.
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Estimated Resident Population Growth Rates between 2004 and 2014 by SA2
Source: ABS, Resident Population Growth, Australia 2004 to 2014 (cat. no. 3218.0)
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Appendix 5
Assessment questions
1. Briefly discuss how to ensure you have sufficient, valid and reliable evidence and
information available to support determining the best course of action to take and making a
final decision.
2. Research and consult specialists, groups or individuals relevant to the case study to
support the following:
a. Contact two (2) specialists or other relevant groups or individuals who could assist in
your analysis and decision-making process
b. Explore and describe what types of assistance, advice or information they can
provide.
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3. a. Who has the authority to make the final decision about what course of action to take to
address the identified business issue?
4. What organisational policies and procedures must be considered when making this
decision?
5. Briefly describe how your recommendation to Emma and Rufus is consistent with
CoffeeVille’s values, objectives and standards.
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6. You have been given this project in early January. Emma and Rufus are aware that,
depending on the course of action chosen, it could take some time to implement the
necessary changes and have an impact on the business’s financial status.
They would prefer the analysis process and recommendation to be made as soon as possible
– by end of February if possible. They have set end of March as the absolute latest
timeframe for this project to be concluded.
Develop a basic planning timeline to present to Emma and Rufus, outlining timings for the
identification, analysis and decision stages and a completion date for the resolution of the
business problem or issue.
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7. Provide three examples of existing and emerging technologies that assist organisations
with knowledge and information management. Describe for each example what kind of
information would be managed for a specific business or industry sector.
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8. Select three quantitative or statistical analysis methods from the following list and
explain what each one measures and in which industry sector it might be applicable for
use:
● Linear programming ● Simulation
● Dynamic programming ● Transportation methodology
● Queuing theory
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9. Select two management information systems/decision support systems that would be fit
for purpose in the following industries and outline their key features.
● The medical and allied health sector
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10. In 75–100 words, explain how information systems can inform risk management plans
and courses of action for an organisation.
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Appendix 6
Presentation of recommendation
Emma and Rufus would like you to present a summary of your research and recommendation. They wish
to ask you questions during or after your presentation to clarify any details and discuss the impact of the
recommendation on their business.
You need to plan and deliver a 10–15 minute presentation to Emma and Rufus on your analysis and
proposed course of action.
1. Prepare a business presentation in response to the scenario described throughout Assessments 1, 2
and 3. The presentation can be delivered as:
a. a presentation to your class.
b. a role-play to two course participants undertaking the role of Emma and Rufus,
CoffeeVille’s owner/managers.
c. a presentation to your assessor undertaking the role of one of CoffeeVille’s
owner/managers.
2. Determine and prepare to discuss:
a. a brief overview of the business issue and analysis techniques used to identify the issue,
determine decision options and analyse the viability of potential courses of action.
b. reasoning for recommended course of action, such as:
i. what data and information supports the recommendation
ii. advice provided by internal or external specialists or consultants
iii. how the recommended course of action is consistent with the business’s values,
objectives and standards
iv. any identified risks.
3. Deliver the presentation to Emma and Rufus. Ensure you deliver your presentation in accordance
with deliverables outlined above and quality specifications listed at the start of this assessment.
4. You may use communication tools to support your presentation, if desired. Tools could include
written handouts, statistical graphs, analysis results, budgets, other financial information or a
PowerPoint presentation.
5. Obtain formal or informal feedback from your presentation participants relating to your
recommended course of action. Formal feedback can be obtained by asking presentation
participants to complete the presentation feedback form below. Informal feedback can be gathered
from questions asked and discussions undertaken during the presentation.
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Presentation questions
The following questions can be asked during or at the conclusion of the presentation by participants
undertaking the roles of CoffeeVille’s owner/managers, Emma and Rufus.
Alternative or additional questions can also be used based on the context and content of the presentation.
1. Is this the only problem or issue CoffeeVille faces? During your research and analysis did you
identify other possible concerns?
2. From a financial perspective, which of the potential courses of action is the riskiest for the
business? What do you base this opinion on?
3. How will this decision affect our customers and employees in the short- or long-term?
4. What timeframe do you recommend for implementation of this course of action?
Presentation formats
Class presentation
Class participants can be assigned specific questions prior to the commencement of the presentation or
encouraged to ask questions and seek clarification on the information provided during the presentation.
Role-play
Two participants are selected from the class to undertake the roles of Coffeeville’s manager/owners,
Emma and Rufus. Questions asked by participants in each role should reflect each owner’s role within
the operation of the business.
● Emma
Emma’s main business focus is marketing the business. She will be evaluating the information and
suggested courses of action based on how it will affect the business’s brand and image, its impact
on customers, how each action will either expand or contract their current market share.
● Rufus
Rufus has been heavily involved in the overall operation of the business’s stores. He will be
evaluating the information and suggested courses of action based on their impact on the business’s
short- and long-term financial viability, including revenue, expenses, staffing. Rufus is keen to
gain new customers while retaining their existing customer base.
Assessor presentation
Assessor can ask recommended questions or modify to reflect information provided during the
presentation. Questions asked should seek clarification and encourage the presenter to discuss the
presentation’s content.
Presentation evaluation
Participants involved in role-plays and/or assessment of the candidate’s presentation can use the
following criteria to assist in providing feedback.
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What feedback can you give the candidate regarding their analysis of the business issue,
potential courses of action suggested or final recommendation?
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