TASK 1
Scenario - Grocery Ltd
In business, good decision making requires effective use of information. A Sales Director of Grocery Ltd, the recently established mass retail business in Dubai, seeks information on the grocery 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. Grocery Ltd operate several grocery stores in Dubai; all stores were established four years ago. During the past two years the company's turnover was growing at rates below the market average. The Sales Director is convinced that the major problem is inability of Grocery Ltd to build customer loyalty.
The grocery stores offer a wide variety of food and non-food merchandise and are located in the mid-income residential neighborhoods where other competing stores also operate. Grocery Ltd do not currently run any discount or loyalty programmes. The Sales Director proposes the launch of private label foods (store brands) and home delivery shopping option.
(1) Your role as the consultant will involve investigation into current and possibly future consumer behavior and attitudes of grocery shoppers in Dubai. Based on your findings you will need to suggest the improvement opportunities to Grocery Ltd in order to boost their sales and retain customer loyalty.
(2) The Sales Director also asked you to evaluate the statistical relationship between the average monthly household income and monthly household grocery spending in Dubai market for the purposes of internal decision making.
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
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.
II. 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
III. 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.
Task 2:
Higher Diploma in Business Management
MODULE 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.
To pass Task 2 you are required to answer all four questions as follows:
Question 1
Beta 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
C Receive consultant's report B 10
D Place equipment out to
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
- 2
engineers to design
equipment
C 1
tender
Higher Diploma in Business Management
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
A 18 4 10
E 5 1 3
F 28 15 27
I 8 0.5 8.5
J 2 16 26
duration (weeks)
Normal cost (in
GBP 000's)
Crashed cost (in
GBP 000's)
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
The daily demand for a particular toy is steady at 40 a day for each of 250 working days (50 weeks) of the year. The toys are currently bought weekly in batches of 200 from a local supplier for £2 each. The cost of ordering the toys from the supplier is £64 regardless of the size of the order. The stockholding cost for one unit for one year is 25% of the unit price.
(a) What are the current annual ordering and holding costs?
(b) Determine the economic order quantity. What would be the annual stock cost savings for the company if they decide to change its policy and apply economic order quantity?
(c) The company can get a discount of 10% if 5000 or more toys are ordered in one go. Is it worthwhile? Please explain.
Question 3
Alpha Ltd are about to replace some of its existing machines. Two machine configurations have been designed by the production engineering department, M1 and M2. Each configuration involves significant capital outlay with estimated cash flows over the next five years as follows:
Estimated cash
flows (in $)
M1 M2
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
Higher Diploma in Business Management
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:
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. (Target 2-3 written pages. Here, discuss different types of information (strategic, tactical and operational), define what MIS is, discuss different types of information systems at different level of management (Executive Support Systems, Decision Support Systems, Expert Systems, and Transaction Processing Systems).
a. Net present value (NPV)
b. Internal rate of return (IRR)