TASK 1
In business, good decision making requires effective use of information. A Sales Director of one of the leading automotive dealer businesses in Dubai seeks information on the car market in Dubai in order to make several important business decisions. He appointed you as his consultant to analyse relevant market data/ information and deliver a professional report based on your findings.
Your role as the consultant will involve investigation into current and possibly future customer preferences of motorists in Dubai while making car purchase decisions. The Sales Director also asked you to evaluate the relationship between the car retail price and car mileage in Dubai market for the purposes of cars pricing.
Learning Outcome L o1: Be able to use a variety of sources for the collection of data, both primary and secondary
1.1 - Create a plan for the collection of primary and secondary data for a given business problem
1.2 - Present the survey methodology and sampling frame used
1.3 - Design a questionnaire for a given business problem
Guidelines to achieve Pass grade for learning outcomes 1.1 - 1.3
- You will need to produce a detailed plan of how you will collect the data, justifying the usage of primary and secondary sources. Primary data can be collected by administering questionnaires. Data from the Internet or other published sources can be used as examples of secondary data.
- You will need to present the survey methodology and sampling frame used. Discuss in your report how the sample was selected from a population.
- Produce a questionnaire for the investigation into the current and possibly future car preferences of motorists while making car purchase decisions in the Dubai market. The questionnaire may ask 10-15 questions; you can circulate your questionnaire within or outside of the college. You can also work on the design of the questionnaire together with a fellow student, if you wish.
You must include a research plan detailing the research objectives, methodology and scope of the research to show that the activities have been planned, managed and organised.
Lo2: understand a range of techniques to analyse data effectively for a business
2.1 - Create information for decision making by summarising data using representative values
2.2 - Analyse the results to draw valid conclusions in a business context
2.3 - Analyse data using measures of dispersion to inform a given business scenario
2.4 - Explain how quartiles, percentiles and the correlation coefficient are used to draw useful conclusions in a business context
- You will need to classify, record and present your market findings appropriately.
- Using market data collected, analyse it by the use of averages (mean, median, mode) and measures of dispersion (standard deviation, inter quartile range).
- You are required to estimate the relationship between a car retail price and car mileage using a linear regression model for a chosen car category. For this, you can use the Internet collected data. You need to calculate and interpret the correlation coefficient.
L o3: be able to produce information in appropriate formats for decision making in an organisational context
3.1 - Produce graphs using spreadsheets and draw valid conclusions based on the information derived
3.2 - Create trend lines in spreadsheet graphs to assist in forecasting for specified business information
3.3 - Prepare a business presentation using suitable software and techniques to disseminate information effectively
3.4 - Produce a formal business report.
- You will need to present your findings appropriately, using spreadsheet graphs (line, pie, bar charts and histograms), tables, scatter XY graphs.
- You will need to estimate the car retail prices for the mileage range outside of your collected source data. For this, trend lines need to be created in existing spreadsheet graphs.
- You will need to produce a formal business report detailing your findings from the tasks above.
You will need to evaluate the research process and the validity of your conclusions. For this, you will need to assess the reliability of data and also describe how your research might have been constrained by time and other factors.
Task 2:
Lo4: be able to use software generated information to make decisions in organisations
4.1 - Use appropriate information processing tools
4.2 - Prepare a project plan for an activity and determine the critical path
4.3 - Use financial tools for decision making.
On the basis of your calculations, advise on which project should go ahead. Give reasons for your answer.
You are required to answer all four questions as follows:
Question 1
Omega Ltd are urgently planning the production of their new lightweight car battery, the "Epsilon". They would like to exhibit their battery at a trade fair, which is to take place in 48 weeks' time. Various activities have to take place before the production could start, and these are shown in the table below.
|
Task
|
Preceding tasks
|
Duration (weeks)
|
|
A
|
Clear area
|
-
|
20
|
|
B
|
Commission consulting engineers to design equipment
|
-
|
2
|
|
C
|
Receive consultant's report
|
B
|
10
|
|
D
|
Place equipment out to tender
|
C
|
1
|
|
E
|
Obtain equipment
|
D
|
6
|
|
F
|
Install equipment
|
A,E
|
30
|
|
G
|
Recruit additional staff
|
C
|
6
|
|
H
|
Train new staff
|
G
|
4
|
|
I
|
Order and obtain materials
|
-
|
16
|
|
J
|
Pilot production run
|
F,H,I
|
3
|
|
K
|
Advertise new product
|
-
|
2
|
1. Draw the network and show that it is not possible to start production within 48 weeks. What are the critical activities and how much total float do the non-critical activities have?
2. It is possible to "crash" (reduce the duration of) certain activities at increased cost. These activities are shown in the table below:
|
Activity
|
Crashed duration (weeks)
|
Normal cost (in GBP 000's)
|
Crashed cost (in GBP 000's)
|
|
A
|
18
|
4
|
10
|
|
E
|
5
|
1
|
3
|
|
F
|
28
|
15
|
27
|
|
I
|
8
|
0.5
|
8.5
|
|
J
|
2
|
16
|
26
|
3. Ron Smith, the Production Manager suggests that only activity I needs to be crashed because this is the cheapest option and allows the greatest reduction in time to be made. Explain why this would not help the situation.
4. It has been estimated that for every week over 48 weeks that this project takes, a loss GBP 8,000 is made as a result of lost profits. Decide on the strategy that will minimise the sum of crashed costs and loss of profits.
Question 2
A paint shop uses 200 tins of paint per day at a fairly constant rate. Tins are now ordered in batches of 1,000 when the stock drops below 500. Delivery time is one day. The cost of placing an order is GBP 100. Holding costs are 25p per tin per day.
i. You have been asked to examine this policy and make any suitable recommendations to reduce costs.
ii. The supplier is offering a bulk order discount of 2% off the selling price of GBP 10 for orders above 2,000 tins. Advise whether or not they should take up the offer.
iii. What is the minimum percentage discount the shop ought to consider to make it worthwhile to order in quantities of 2,000?
Question 3
Rage Ltd are about to replace some of its existing machines. Two machine configurations have been designed by the production engineering department, C1 and C2. Each configuration involves significant capital outlay with estimated cash flows over the next five years as follows:
|
Estimated cash flows (in $)
|
C1
|
C2
|
|
Initial cost
|
(125,000)
|
(140,000)
|
|
1
|
30,000
|
30,000
|
|
2
|
35,000
|
40,000
|
|
3
|
40,000
|
50,000
|
|
4
|
40,000
|
60,000
|
|
5
|
40,000
|
70,000
|
Assume that the machines have residual value of nil and the company's cost of capital is 15%.
i. You need to calculate for each machine configuration:
a. Net present value (NPV)
b. Internal rate of return (IRR)
ii. Evaluate the configurations using the calculated indicators and provide recommendations on the machine configuration.
Question 4
Discuss the use of MIS in the context of decision making at different levels of the organization.