Decisison Making - Assignment Example

Project management Project management Task 4 A management information system (MIS) involves control, data, and the system that links the input with the output of a network. The management is a decision-oriented entity, which needs the correct data to make profitable strategies (Shajahan, S., & Priyadharshini, R., 2004, 53). A MIS provides information and guidance that is necessary for effective decision-making. In strategic operations, the MIS helps in gathering of environmental data such as changing technology, shifting markets, and competitive value of an organization (Frankel, G.

2008, 123). Such information helps towards forming strategic partnerships. In tactical operations, MIS helps in organizing information that pertains to resource levels and production capacities of an organization (Bagad, V.S.2009, 39). This may help in instilling efficiency in a supply chain. In operational strategies, the MIS may help in gathering data for items such as attendance, schedules, and types of equipment. This may help in organizing employee trainings (Sousa, K., & Oz, E. 2014, 89). Task 4.2Activity Preceding activityA,B-C,DAEBFCGD,EThe network can follow three paths.

To begin with, the A activity may occur first, followed by the B activity, and finally the F activity. Alternatively, the activities may occur in the A, B, D, and G sequence. Lastly, the activities may occur in the B, E, and G sequence. All these three paths qualify as critical paths. Following the three paths saves on time that would be spent on following the seven activities sequentially. Task 4.3ARR (Average Rate of Return) and NPV (Net Present Value) are measures of appraisal that accords the value of a project before it commences.

These measures deal with projections rather than real-time recording of data. ARRARR is a measure of profitability that relates income to investments. In this sense, both income and investments are measured in accounting terms (Harris, E. 2012, 78). ARR occurs by dividing average income, after depreciation, by the initial investment. ARR=Average returns after depreciation/Initial investment=Ʃ (Cashflows/n)/ (Iₒ)Whereby; n=the lifetime of a projectIₒ=Initial investment ItemsYear Figures(‘£ 000, 000)Cost(380, 000)Estimated lifespan8Estimated net returns (before depreciation)201560, 000201660, 000201760, 000201860, 000201960, 0002020100, 0002021160,0002022200, 000Interest rate=10%Total returns before depreciation=£ 760, 000Depreciation= ((10/100) × 380, 000) ×8=304, 000Total returns after depreciation= (Total returns before depreciation- Depreciation)=760, 000-304, 000=£ 456, 000Average returns after depreciation=Total returns after depreciation/lifetime of the project= (456, 000/8) = £ 57, 000ARR= (Average returns after depreciation/Initial investment) ×100=57/456×100ARR=12.

5%This means that the project is viable because it gives a positive ARR. NPVNPV is a time-adjusted appraisal measure that discounts the present value of future cash flows (Rogers, M., & Duffy, A. 2012, 102). NPV equals the sum of the present value of future returns associated with a project. NPV=CFₒ/ (1+r) 0+ CF1/ (1+r) 1+…..+ CFt/ (1+r) t=ƩCFn/ (1+r) nNPV=net present valueCFt=cash flow occurring in period tr=interest rate (weighted average cost of capital)n=life of the projectNPV=(-380, 000)/(1+0.1)0+60, 000/(1+0.1)1+60, 000/(1+0.1)2+60, 000/(1+0.1)3+60, 000/(1+0.1)4+60, 000/(1+0.1)5+100, 000/(1+0.1)6+160, 000/(1+0.1)7+200, 000/(1+0.1)8= (-380, 000) +54,545.45+49586.78+45078.88+40,980.81+37,255.

28+56, 447.39+82, 105.30+93, 301.47=£ 79, 271.36 (‘000, 000)=£ 7,927,136,000,000The NPV measure gives a feasible solution. This means that the project is feasible since the NPV measure gives a positive value. BibliographyBagad, V.S., 2009. Management information systems, New Delhi: Technical Publications.Frankel, G., 2008. Quality decision management -the heart of effective futures-oriented management: a primer for effective decision-based management, New York, NY: Springer.Harris, E., 2012.

Strategic project risk appraisal and management, London: Gower Publishing, Ltd.Rogers, M., & Duffy, A., 2012. Engineering project appraisal. Hoboken: John Wiley & Sons. Shajahan, S., & Priyadharshini, R., 2004. Management information systems, New Delhi: New Age International.Sousa, K., & Oz, E., 2014. Management information systems, Mason: Cengage Learning.