Establishment of a Restaurant in Manchester - Assignment Example

Business Decision Making Business & Finance Course Tutors: Name: Student number: Date: Task 1 Establishment of a restaurant in Manchester. 1.1 Our study will heavily rely on primary data. This is in order to have contact with the real people and have first hand information on their needs. Primary data will also help us personalize our business. It will be set to provide that missing contact between the already established restaurants and their customers. The main advantage of relying on primary data is because it will be collected for our specific needs (Mooi and Sarstedt 2011, p.29). Data from relevant authorities will be sought in order to establish the location of the different restaurants in Manchester. The researcher will make use of that data to try and establish the reason for locating in the identified areas. The authorities will also provide data on areas near parking areas. The most important decision that will be made is identification of the best location for the restaurant. It must be located near a park where people come to rest so that they find it easy to access. The location must be spacious to provide enough parking spaces for customers. The business will also consider location of other restaurants. As a result it won’t be established too close to already established restaurants. This will also make it easier for customers of other restaurants try our service without much difficult. However, a study must be done in order to establish where most people prefer to rest or spend free time. Also challenges that customers face in accessing other restaurants in the area will be established. The most important point at this stage is identification of the best source of data. The data provided must be relevant in helping us establish the business. There are different methods of collecting data using the primary approach. One is through administering of questionnaires. It is a list of questions which the respondent is expected to answer to. A questionnaire can be administered in a number of ways such as through mail. Its main advantage is that it is cheap and conceals the identity of correspondent (Kumar 2010, p.145). When carrying out a market research, the use of both primary and secondary data will be used in handy. In order to get primary data, he researcher will need to obtain the information that has directly come from the source or the target market for the new restaurant. As a result, the marketer will use interviews, focus groups, observation and surveys as methods of primary data collection. On the other hand, the researcher may opt to use secondary data in order to launch the restaurant business and therefore websites, journals, restaurant industry publications, government agencies and even chamber of commerce information will be used. The researcher opted to first use secondary data in order to ascertain and identify the relevant information that was needed and therefore the first place to start searching for such information was on the internet and in the local libraries. This helped the researcher to get information regarding any other restaurants in the vicinity, ascertain their weaknesses and strengths and thus come up with a comprehensive plan to counter them and have a competitive advantage. The researcher decided that the most appropriate and relevant sampling frame and sampling methodology that could be used in the investigation was the use of secondary sources. It was ascertained that indeed, the use of secondary sources of data collection was more beneficial as opposed to the primary data collection because it was less resource intensive because other people had already collected the relevant or needed information that the researcher was looking or searching for in order to address or deal with the research questions. The researcher also saw it wise to integrate both the primary and secondary data in order to avoid the challenges associated with the use of the secondary data alone whereby one could not easily find precise or specific answers aimed at addressing their research questions. The use of the secondary data was more beneficial as opposed to the primary data because some of the data was actually enough to solve the problem and greatly helped in the collection of primary data as well. 1.2 Sampling frame is the population where the researcher can derive his or her sample. It should be all inclusive (Denscombe 2007, p.19). Survey refers to systematic method of gathering information from a given sample. Survey methodology refers to the technique employed in gathering information (Groves et al. 2009). In our study, more emphasis will be put on people who reside or work in Manchester. This is in order to ensure that the opinion derived meets out needs. Questionnaires will be the main source of information. Most questionnaires will be administered through mail so as to give respondent enough time to answer all the questions. According to Som (1996), sampling refers to process by which conclusions about a given population are drawn from a sample which had been drawn from that population. Sampling technique would therefore refer to the approach used in getting a given sample. Simple random sampling method is one of the most used approaches (Thompson 2013, p.11). The main advantage of this method as Black (2012) notes is that every unit of the population has an equal chance of being selected as a sample. A sampling frame refers to the complete list of all the members of a particular population that one will wish to study during the research. For instance in the research study for launching a restaurant, examples of a sampling frame may include the numerical identifiers for each of the individual in the research study and other identifying information regarding the characteristics of a person which are capable of helping in the analysis and allowing for the division of the frames into more in-depth analysis. The first step in the creation of a sampling frame is the definition of the sampling unit. A sampling unit can actually be defined through the economic activity, type, location, size activity periods and other factors or parameters as well. There are various types of sampling units and these includes among others the enterprise, the local unit, the Farm, the Local Kind of activity Unit or the local KAU and the Kind of Activity unit or the KAU. At most times, there is normally lots of auxiliary information that can be availed in the sampling frames for the launching of the new restaurant and such information includes the location of the enterprise that is usually coded by the National Territory Classification, the number of employees, the amount of transactions that is imposed through the Value Added Tax and the main economical activity that will be carried out by the restaurant. On the other hand, despite the fact that there are 3 major types of survey methodologies, it should be noted that each of them actually has its own risks. For instance, there is the use of the Open Ended Questions, the partially categorized questions, and the closed questions. Despite the fact that there are various methodologies which can be used in order to design surveys, it should be noted that indeed, each type of question actually has its own drawbacks and benefits. However, in this research study, the partially categorized questions were considered as being the most appropriate and relevant because they not only yielded reliable data but they were also capable of yielding the most accurate data and results. On the other hand, the most appropriate Sampling Frame in this research study is the use of the simple random sampling method. Collection of Data from the UK Clients 1.3 QUESTIONNAIRRE 1. What is your Gender? (A)Male (B) Female 2. What is your monthly income? Less than £1000 £1000-£2000 £2000-£3000 £4000-£5000 Over £5000 3. How often do you have your meals in a restaurant in a week? 4. What factors affect you attendance to restaurants? 5. Are you satisfied with the quality of services currently provided by city restaurants? Yes or No 6. If no, then why? 7. How do you rate the services currently offered by existing restaurants? Excellent Fair Good Poor 8. If a new restaurant is opened, would you give it a try? Yes or No 9. Have you ever taken meals in a restaurant? (A) YES (B) NO Task 2         YEAR SALES EXPENSES NET INCOME 1995 15000 20000 5000 1996 20000 25000 5000 1997 24000 30000 6000 1998 20000 40000 20000 1999 18000 35000 17000 2000 25000 50000 25000 2001 20000 45000 25000 2002 30000 65000 35000 2003 24000 45000 19000 2004 28000 55000 27000 2005 30000 60000 30000 2006 40000 90000 50000 2007 22000 45000 23000 2008 15000 24000 9000 2009 25000 52000 27000 2010 35000 62000 27000 2011 16000 38000 22000 2012 28000 56000 28000 MEDIAN     24000 TOTAL NET INCOME     400000 MODE     27000 MEAN     22222.22222 22222.22 MEAN 24000 MEDIAN 27000 MODE 11342.56 Standard Deviation 0.789729 Correlation coefficient between sales and net income 17500 first quartile 24000 second quartile 27000 third quartile 27600 80th percentile 2.1 The net income i) Mean= £22222.22 ii) Median= £24000 iii) Mode= £27000 2.2 Mean, mode and median are measures of central tendency. The choice on what measure to use is affected by among other factors the distribution of given data or population, the purpose of that statistic and also the nature of a given variable (Kirk, 2008). He goes further to defining these measures; i) Mean is also known as average. It is defined as that point where the population distribution balances. The main advantage of use of mean as a measure of central tendency is its sampling stability. In addition, the mean is conformable to arithmetic and algebraic manipulation unlike the mode and the median. However, the main disadvantage is it can be used in three circumstances. First, when the distribution of the population is very skewed. Second, when the data provided is not quantitative and lastly when the statistical distribution is open-ended. ii) Median is a point score that cuts the given scores into two equal parts. The main advantage is that it can be used even in cases of very skewed distribution unlike the mean. It can also be used in cases of open-ended distributions. It is also easier to compute especially when there are less number of scores. However, its main disadvantage is has poor sampling stability. In addition, it is a poorer mathematical flexibility. iii) Mode is the value with the highest frequency. Its main advantage is that is can be used in cases of unordered qualitative variables. However, it has a sampling stability that is poorer than that of both the mean and the median. In addition, it is less mathematically flexible (Kirk, 2008). Advantages and disadvantages of Using the Mean, Mode and Median The table below shows both the advantages and disadvantages of the mean, mode and media: AVERAGE ADVANTAGES DISADVANTAGES MEAN All the data is used in finding the answer The answer can be distorted in both very small and large numbers MEDIAN It is not affected by both small and big values It takes a lot of time to calculate large data sets MODE It is the only average that can be used incase the data is not numerical There can be more than one mode. There can be no mode especially if the data is the same. It may not represent the data accurately. 2.3 Standard deviation shows the closeness of the data given to the mean value. The standard deviation of the net income is £11342.56. Since the standard deviation in this case is small, it means the income distribution is uniform How standard Deviation is useful for Businesses Standard deviation is important in business because it is used in depicting dispersion or the amount of variation from a budgeted value. It is also used as a measure of risk and therefore the higher it is (the standard deviation), the higher the risk. In addition to that, it is also used widely in “modern portfolio theory” like for instance in determining the range of the future possible performances and the probability that is attached to each specific performance. 2.4 Correlation coefficient between sales and net income is 0.789729 First quartile (Q1) is 17500 Second quartile (Q2) is 24000 Third quartile (Q3) is 27000 Inter quartile is the difference between Q1 and Q3 =27000-17500=9500 The 80th percentile is £27600 Quartiles measures central tendency but in addition shows how data is distributed on both sides of the median. The 80th percentile is £27600. This means that 80% of net income is equal to or less than £27600. Correlation coefficient is used to measure the relationship between two variables. It ranges from -1 to +1. (Brase & Brase 2012, p.12). In our case, 0.79 is an indicator of a strong positive relation between sales and net income. Increase in sales affects level of net income positively. Task 3 3. i) line graph YEAR ADVERTISING SALES 1995 100 1200 1996 120 1400 1997 150 1500 1998 170 1800 1999 200 2200 2000 240 2300 2001 260 2400 2002 320 2780 2003 380 3200 2004 440 3750 2005 460 4460 2006 490 4820 2007 510 5000 2008 550 5670 2009 585 5900 2010 600 6300 From the diagram above, both sales and advertisement have been increasing over time. However, sales have been increasing at a higher rate than sales. This is therefore an implication that with time, the business is bound to do well and thus become profitable in future. The increase in the sales can be projected as a sign of the organization’s profitability and therefore it is quite probable that the business is bound to do well in future. 3. ii) pie chart and bar chart BRANCH NET INCOME Manchester 2300 Coventry 1400 Wolverhampton 1000 Solihull 1600 Stote 900 In the pie chart above, the contribution of each branch is given by percentage. Manchester branch is the biggest contributor with 32% followed by Solihull, Coventry,Wolverhampton and Stock each with 22%, 19% 14% and 13% respectively. The bar chart shows the contribution of each branch by the amount of income generated. Manchester branch has the longest tail indicating its big contribution. Stoke has the shortest tail. 3. iii) Rate bins frequencies 18 0-10 0 24 11-20 1 25 21-30 9 25 31-40 4 27 41-50 5 27 51-60 3 27 61-70 2 29 71-80 3 29 30 31 32 33 36 43 43 43 43 45 52 54 54 67 68 71 73 75 4.1 MANAGEMENT INFORMATION SYSTEM Most projects are built around a project management system. This management system is comprised of project planning systems, project control systems and project information system (Nagpal 2011, p.300).Managers and directors in modern times have come to realize the key role that technology is playing and its capacity. It has the capacity to change the long-term strategic position of a given company. Some information systems have the capacity to even change a company’s product or service. This has made information system come part and parcel for planning in most organizations (Sousa and Oz 2014, p.34). Riahi-belkaoui (2002) notes that major information systems comprise mainly of financial, personnel and logistics. The operations function combines inputs with the production process so as to come up with an output. Operation function comes up with ideas on areas of improvement for the different processes. In recent times, the role of human resource has gradually changed from administrative to strategic role. Their main responsibility is to come up with medium strategies for the organization. Tactical functioning of an organization addresses current operations of an organization. It mainly involved in short term planning not spreading beyond one year. The use of Management Information Systems in the operational, Strategic and Tactical functioning of an Organization The use of Management Information Systems or the MIS is to provide information that is capable of helping managers to not only manage their information effectively but also efficiently. MIS will greatly help the company in its operational functioning in that due to the use of the computers and the internet plus the relevant software, the organizations operations will be enhanced in terms of speed, accuracy, volume, costs, presentation and even complex tasks will easily be managed. The use of MIS is a valuable strategic resource because it can help the restaurant to gain a competitive advantage through linking it to both its customers and suppliers, creating an effective integration regarding the use of information through the value addition processes and enabling it to create, market and deliver new products and services. It is also important in that it can help the organization by giving the top management information that can help it to both develop and implement strategy. Examples of Management Information Systems Software Good examples of MIS software are the Enterprise Resource Planning (ERP) and the Executive Information Systems (EIS). 4.2 Project management can be defined as an organized management of a group of interrelated project to ensure proper utilization of available resources in ensuring accomplishment of projects within given time and cost without compromising the quality (Lester 2014, p.11). Determine critical network using network diagram DEFINITIONS Early start is the earliest time that a given activity can start. It can be affected by the progress of the project. Late start refers to latest time when a given activity can begin without affecting or delaying a given milestone. Early finish refers to a given period when a given activity that is not yet completed can be finished. It is also affected by project progress. Late finish refers to the latest time when a given activity can be accomplished without delaying a given milestone. Slack is used to refer to the number of days by which a given project is ahead of schedule. This provides project management with more time to work without much fear (Punmia and Khandelwal 2002, p.135). The Earliest Start or the ES, the Latest Start o the LS, the Earliest Finish or the EF and the Latest Finish or the LF are quite important for the project manager because they allow for one to work in a way through which the duration of the project is minimized. It also enables the project managers to know that some of the activities in the organization can be minimized while some of them can be indeed implemented simultaneously while the efforts can be concentrated on the completion of other activities which actually impose a time frame for the project completion. The network Diagram Harris (2008) defines dummy activity as one without duration whose main and only purpose is to show relationship and route of activity in the arrow diagramming approach. References BLACK, K. (2012). Business statistics: for contemporary decision making. Hoboken, NJ, Wiley. BRASE, C. H., & BRASE, C. P. (2012). Understanding basic statistics. Pacific Grove, Calif, Brooks/Cole. DENSCOMBE, M. (2007). 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