BTEC Higher National Diploma (HND) in Business

Business Decision Making

February 2012 June 2012

Tutor: Mr. Jawad Hassan INTRODUCTION

In business, good decision making requires the effective use of information. This unit gives learners the opportunity to examine a variety of sources and develop techniques for four aspects of information: data gathering, data storage, and the tools available to create useful information and present it. Computers are used in business for much of this and thus the appreciation and use of appropriate IT software is central to the completion of this unit. Specifically, learners will use spreadsheets and other software for data analysis and the preparation of information. The use of spreadsheets for the manipulation of numbers, and understanding of how to apply the results, are seen as more important than the mathematical derivation of formulae used. They will also gain an appreciation of information systems currently used at all levels in an organisation as aids to decision making. Learners are required to write a report in two parts; first part will consist of the collection and analysis of the data and the second part is presentation of the data and use of the software to interpret and present the business information. In writing the report, the work that you present must be your own. However, you will clearly have to work with and present the work of others. Ensure that you clearly indicate the relevant source(s) of material that you present to support your work.

SPECIFICATION FOR ASSESSMENT

You are required to produce a report in two parts showing evidence of application of the data collection techniques and processes to analyse and present these data sets. You are also required to show your familiarity with the popular software to analyse, interpret and present the business information. Unit 6 Business Decision Making Page 2 of 10

REPORT STRUCTURE AND POINTS TO BE COVERED IN THE REPORT

Before you write your report, you should choose an organization that has offices/operations in this country. Your report should have following format: Synopsis of the company: you should cover the type of business the company is in, history, business growth, and geographical location/spread.

ASSIGNMENT INFORMATION
Case study

Cosmito Plc is an emerging cosmetic company based in Brazil. They have been doing business successfully in Brazil for the last 25 years. Cosmito Plc is mainly natural cosmetic producer and had been running business successfully in South America for the last 13 years. Recently Cosmito Plc has decided to expand its business in Europe especially in the UK. Traditionally UK has been very trendy country for the fashion and cosmetics. At present, there is a trend of using natural beauty products and cosmetics. There are several UK based renowned brands of cosmetic companies and other famous cosmetics and toiletries companies from around the world that are doing business in the UK. You have been appointed as a business manager to make business decision for Cosmito Plc in the UK. As a business manager you have been assigned to write a report covering issues of task 1 and task 2 and submit to the CEO of Cosmito Plc to make a business decision to enter in UK market: For the purpose of the report, the following data is relevant. Monthly sales for the last 10 months in thousands are as under: Jan Feb Mar Apr May June July Aug Sept Aug 113 110 125 130 137 113 147 153 159 164 This assignment consists of two tasks: Task 1: Collection and Analysis of Data The student should select a business problem and do the following: 1.1 Prepare and implement a plan for the collection of primary and secondary data for Cosmito Plc business problem. The learners are expected to collect data for Cosmito Plc in mind. (AC 1.1); 1.2 Describe and justify the survey methodology and frame used in the collecting primary data for Cosmito Plc (AC1.2); 1.3 Develop and use a questionnaire for primary research for Cosmito Plc and justify its design for the particular purpose of collecting primary data (AC 1.3); 1.4 Demonstrate that effective judgement has been made in justifying the survey Unit 6 Business Decision Making Page 3 of 10 methodology and frame used in AC 1.2 and in justifying the questionnaire design in AC 1.3 (M1); 1.5 Create information for decision making by summarising data using representative values, and use the results to draw valid and useful conclusions in the context for Cosmito Plc (AC 2.1); 1.6 Analyse the results to draw valid conclusions for Cosmito Plc in a business context (AC 2.2) 1.7 Analyse data using measures of dispersion, and use to inform the given business scenario (AC 2.3); 1.8 Demonstrate that a range of methods and techniques have been applied for calculating representative values for AC 2.1 and measures of dispersion in AC 2.2 (M2); 1.9 Calculate quartiles, percentiles, correlation coefficient of the collected data, and use them to draw useful conclusions in the business context AC 2.4; 1.10 Demonstrate that synthesis has been used to generate and justify valid conclusions

made in the business context in terms of the representative values in AC 2.1 and in terms of measures of dispersion in AC 2.3 (D1); Task 2: Presentation of the data and use of software generated information. Using data from the above business scenario you are required to do the following: 2.1 Prepare a range of graphs using spreadsheets for the collected data line, pie, bar charts and histograms, and draw valid conclusions based on the information derived (AC 3.1); 2.2 Use trend lines in spreadsheet graphs to assist in forecasting for specified business information and thus inform decision making (AC 3.2); 2.3 Demonstrate that appropriate technique has been applied for forecasting in AC 3.2 (M3); 2.4 Prepare a business presentation using suitable software and techniques to disseminate information effectively and persuasively (AC 3.3); 2.5 Prepare a formal business report (AC 3.4); 2.6 Demonstrate that validity of the results have been judged in the business report in AC 3.4 (D2); 2.7 Use appropriate information processing tools 2.8 Prepare a project plan and determine the critical path for the activity 1on page 191, given in the class. (AC 4.2) 2.9 Use financial tools discounted cash flow, payback period and provide a theoretical overview of internal rates of return (IRR) and accounting rate of return (ARR) to evaluate the financial viability of proposed investments in case study provided in Appendix 1 (AC 4.3); 2.10 Demonstrate that unforeseen have been accommodated in evaluating the financial viability in AC 4.3 (D3); Unit 6 Business Decision Making Page 4 of 10
Appendix 1 Case Study BBB Ltd

BBB Ltd is a successful high street fashion house that wishes to expand its business over the next 5 years. The company is considering 2 options. Option A involves the purchase for 400,000 of the adjoining empty shop to make a larger retail outlet for its own branded clothing. The cash flows associated with this option are given below. Option B involves the purchase of a similar fashion retailer in a nearby town for 850,000. This would entail spending 100,000 initially to convert it to the BBB Ltds style. Cash flows are estimated to be 250,000 in the first year, rising by 50,000 p.a. in each of the next 4 years. Cost of capital is 10%
Option A Year Cash Flow 1 100,000 2 140,000 3 180,000 4 210,000 5 230,000 Option B Year Cash Flow 1? 2? 3? 4? 5? Year Discount factor at 10%

1 0.91 2 0.83 3 0.75 4 0.68 5 0.62 Required 1. Management of BBB Ltd requires to compute the cash flows of Option B. Evaluate and recommend which of the two options should be selected using the following techniques: (i) Payback period (ii) Net Present Value 2. Give a theoretical overview for Internal Rate of return and explain its merits and de-merits. 3. A project has a net profit of 1500 and requires an investment of 1000. Calculate its accounting rate of return and explain its significance. (Clearly state advantages and disadvantage of each method) (AC 4.3) Unit 6 Business Decision Making Page 5 of 10

Learning outcomes, assessment and grading criteria Outcomes

Assessment criteria for pass To achieve each outcome a learner must demonstrate the ability to:

1. 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 2. Apply a range of techniques to analyse data effectively for business purposes 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 3. 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 4. Use softwaregenerated information to make decisions at operational, tactical and strategic levels in an organisation 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. Merit Descriptors Distinction Descriptors M1: Apply relevant theories and techniques D1: Evaluate using defined criteria M2: Apply a range of methods and techniques D2: Demonstrate autonomy/independence M3: Justify the selection of methods and
techniques D3: Demonstrate convergent/lateral/creative thinking
Unit 6 Business Decision Making Page 6 of 10 Achievement of a pass grade A pass grade is achieved by meeting all the requirements defined in the assessment criteria for each individual unit. Achievement of a merit or distinction grade All the assessment criteria and merit grade descriptors need to be completed within a unit to achieve a merit grade. All the assessment criteria, merit and distinction grade descriptors must be completed within a unit to achieve a distinction grade. Unit 6 Business Decision Making Page 7 of 10

GUIDANCE & POLICIES FOR ASSIGNMENT SUBMISSION

1. Use a standard format. 2. Use Harvard referencing system. 3. Complete the title page and sign the statement of authenticity. 4. Submit the document in a folder in the form of a file on the date specified in the plan. Submission should be a soft copy and a hard copy. 5. Collusion and Plagiarism must be avoided. 6. Highlight each question clearly. 7. Pages should be numbered. 8. Assignment sheet should be attached in the front. 9. Bibliography at the end of the assignment. 10. All work should be comprehensively referenced and all sources must be acknowledged fully, as books and journals, websites etc.Try to give the page numbers, publisher details and year of publication with the authors support. 11. Use a common format for the questions as Introduction (analyze the question.) Underpinning Knowledge (write about the relevant theory/points) Applied knowledge Conclusion (summarizing the whole scenario keeping in view pass, merit, distinction criteria.)

ASSIGNMENT GUIDELINES

1. Make sure that you address the assessment criteria fully for a successful result. 2. Use the computer to research recommended websites and preferably word process your assignment.

3. Content of work is more important than the length.

SUBMISSION FORMAT
Students are not to submit any assignments to the lecturer assignments can be submitted to any person authorised by the college. We advice students to use Viper Program in order to estimate the Plagiarism percentage. Students should send an electronic copy of their assignments including the Plagiarism Report to edexcelassignments@cecos.co.uk If a student fails to send the soft copy to the above mentioned email address, college reserves the right to refuse the marking of that particular assignment. When sending an electronic copy to the email address, please supply the following information in the subject box in the order provided below: Edexcel Registration Number, First Name, Last Name, Unit Number, Lecturer name. Unit 6 Business Decision Making Page 8 of 10

RE-SUBMISSION OF ASSIGNMENT
Students are able to receive feedback from the lecturer and take guidance about the areas of weakness so that the student is able to build upon the work of the first submission. The feedback supports the student in the management of re-submissions as well as the successful completion of the assessment. Please note that the assignments can only be re-submitted once. If after resubmission the assignment is not up to the required standard, the assignment shall be graded as failed eventually resulting in the relevant unit to be taken all over again and full fee to be paid for that unit. Such cases will be subject of a 30 fee.

EXTENSIONS AND EXTRA ORDINARY CIRCUMSTANCES

Lecturers are not permitted to change deadlines unless discussed. Extensions are only granted for documented medical reasons or other documented unavoidable serious interruptions relevant to your ability to study. Extensions are not granted due to an inability to organise your time or work practices. Should there be extra ordinary circumstances; the college should be made aware of these in writing. If disallowed or the student fails to inform the college in time, the college reserves the right not to accept / mark the assignment. Unit 6 Business Decision Making Page 9 of 10

PLAGIARISM AND COLLUSION

Plagiarism occurs when someone copies or reproduces another persons words or ideas (journal articles, text books, web material or other students work) and presents them as their own with no proper acknowledgement via citation and referencing. Collusion is when two students work together and submit an individual assessment that is not entirely their own work. All are forms of cheating and will be treated with severe penalties. To ensure that you are not guilty of plagiarism, you must always declare all sources from which you

have obtained material or ideas by citation in the text and an associated reference list at the end of your work. If unfair means are found, assignment shall be failed leading the entire unit to be taken again. All assignments involving plagiarism and collusion shall be referred to the assessment board who will then decide about all such cases. Until a decision is reached by the board, unfair means or UFM shall be recorded as a grade.

OTHER UNFAIR MEANS

Students sometimes try to submit incomplete assignments i.e. less than 60 percent of the pass pointers attempted or irrelevant assignment or someone else work just to get some more time to complete their assignments and submit later during re-submission time allowed by the college. All such practices will be dealt with severe punishment and shall be forwarded to the assessment board. Until a decision is reached by the board, unfair means or UFM shall be recorded as a grade. It is the prerogative of the Programme leader to decide which cases to be classed as UFM.