Business Decision-Making - Assignment Example

Business decision making Task Plan As a result of the numerous s’ complains a survey has to be carried out so as to find out the reasons that lead to the dissatisfaction among the customers. The customers may be dissatisfied as a result of poor service, poor communication or low quality products and services. The survey can be carried out by the use of a well laid out plan that will give the reasons that have lead to the dissatisfaction and the solutions that can be used so as to create satisfaction among the customers. A survey can be described as a systematic method that is used in the gathering of information. The survey in our scenario will be used to show the attributes that are found in the customer population (Lawrence, 2000). Survey methodology This can be described as the study of the methods that are used in a survey and any possible sources of errors in the survey. The methodology that can be used in the survey is the use of cross sectional surveys. This is a method that gathers information from a population from a particular pint. In our case, the customers can be asked about the different causes of dissatisfaction for the previous 6 months. That will ensure that the problem is diagnosed by the use of the most current reasons as opposed to dealing with things that may have happened many of years ago (Jackson, 2001, pg 59). The other method that can be used is the use of longitudinal surveys. The method usually7 gathers information that may have been collected over a long duration of time. The person that is conducting the survey then analyses the changes that may be occurring in the population that is been observed. There are three types of longitudinal surveys; Trend studies- the study usually focuses on a population that has been chosen. The population is usually scrutinized and sampled repeatedly. In our case, the population of our customers can be categorized by the type of complains that may be similar from different customers. An example of the trend study would be a survey on customer complains that were asking about wrong service delivery. Cohort studies- The studies also usually focus on a populating that is defined, studied and sampled for more than one time. However, this type of study usually has a different focus. In our case, we could get a sample of customers that were questioned five years back in regard to poor service. The population can be compared with a current population that should be totally different but the question asked should be the same (Hennelly, 2001, pg 234). Panel studies- the study usually helps the person carrying out the research to search for the reasons that cause changes in different populations. The survey usually uses the same people in all the instances of the study and hence a change will be noted and hence easy to establish the cause of change. The sample that is used in this study is usually known as a panel. Sampling frame A sampling frame can be described as an outline that is fully detailed in terms of the measurements that will be taken and the times that the measures will be taken. The sampling frame should be tailored made in a way that there will not be any form of biased in the sample and the sample will be a representative of the overall population. In our situation, our data should be collected from the customers that usually frequent the business. This is because the frequent customers are usually aware of the company policies and any changes that may have occurred over time may be notable top them and they can easily spot the changes and that would be a good thing for the survey that is been carried out (Miall, 1998, pg 56). Questionnaire The questionnaire will be filled by the selected population. The questionnaires will have the same questions so as to ensure that the valuation is made uniformly. The questions that may be found in the questionnaire may include the following; 1. When did you start transacting with us? 2. How is the reception when you come into our business? 3. How can you rate our customer services as compared to other places? 4. How good is the communication in our business? 5. What are some of your source of satisfaction in our business? 6. What are the causes of dissatisfaction towards our business operations? 7. What recommendations would you make that you think will help in proper facilitation of services? Task 2 The data might have been collected by the use of random sampling. Measures of dispersion Range - it is usually used as a preliminary indicator of dispersion. The disadvantage of the method is the fact that it makes use of the scores that are fund at the extremes and hence not suitable. Quartile scores- the measure is usually associated with more information as compared to range and it is usually not affected by extreme figures. However, the measure is not easy to use and hence not as frequently used as range and they do not have properties that are mathematical. Task 3 Benefits of an automated MIS over paper system Technology has been associated with the rampant changes in the business world and the way that businesses organizations have facilitate the running of businesses. In the past, organizations usually used manual recording and filling. The introduction of technology that came with automated processes has been beneficial and it is associated with more advantages as compared to the manual systems. The following advantages can be associated with the automated system; 1. Recording and filling- in the automated system; it is usually easy to record information that is required. It is also easy to review the file and also revise the files that may be involved. In the case of the paper system, it is hard to revise any information that may be found in the papers because it may call for new drafting of the document especially whereby there are some changes that may be applied in the previous document. 2. Time saving- in the case f the automated system, the search of files is usually automated and it does not take a lot of time as compared to the paper system in which a person has to carry out a physical search process that is usually tiring and time consuming. 3. Cost saving- In the long run, it is usually cheaper to maintain an automated system. It is usually cheaper because it does not take up a lot of space and that is a cost saving attribute on the side of the rent payable. The system also cuts on costs by hiring only a limited number of employees who are involved in the filling and recording. It is also cheaper because it does not involve a lot of paperwork. B Network diagram Critical path= A-D-H-I-J-K A critical path is the path that is used by a project that will be used in the completion of a project. That will be used in the reduction of costs that are supposed to be incurred in the project. That will ensure that the project costs are kept to the possible minimum. The network diagram could be further refined by some of the activities been performed at the same time. That would ensure that there is time saving and that there is no duplication of activities and jobs that are taking place in the work area. That will also ensure that there is reduction of costs. C the other substitutes that can be made available for the network diagram would be the use of gannt charts. Gantt charts are also useful in the illustration of the way that projects can be completed accurately and within the specified time period. Task 4 Calculation of IRR Year savings Discounting rate @10% Discounted savings 1 20000 0.909 18180 2 25000 0.826 20650 3 30000 0.751 22530 4 45000 0.683 30735 Total Discounted savings 92095 Less initial cost (90000) NPV 2095 Year savings Discounting rate @15% Discounted savings 1 20000 0.869 17380 2 25000 0.756 18900 3 30000 0.657 19710 4 45000 0.571 25695 Total Discounted savings 81685 Less initial cost (90000) NPV (8315) Calculation of IRR IRR= lower discounting rate+ [(higher rate- lower rate) (NPV of lower rate)]/ (NPV of lower rate- NPV of higher rate) =0.1+ [(0.15-0.1)2095]/ [2095- (-8315)] =0.1+ (104.75/10410) =0.1+0.01 =0.11 =11% Advantages of IRR 1. Time value of money; Most investments projects are usually set for the future. Therefore, it is hard to determine the viability of a project in the current time if there is no appropriate technique that can be used to calculate the viability of the project in its present time. IRR has the ability of forecasting the future expected returns at its present time. Therefore, we can conclude that the advantage of using IRR is the fact that it bears in mind the time value of money in the evaluation of projects. That will therefore make IRR technique more suitable over other techniques such as the accounting rate of return (Feldman, 2004, pg 243). 2. Simplicity The advantage with the use of IRR is the fact that after the IRR is calculated, it is usually very easy to interpret the results. The method has a decision criterion that is easy to use. Therefore, managers will find it easy to visualize and hence the technique is more preferable not unless scenarios that involve projects that are mutually exclusive are been considered. 3. Hurdle rate not required The hurdle rate is usually subjective and hard to determine. The advantage of using IRR is the fact that the technique does not require the usage of a hurdle rate because the calculation is usually not dependent on the hurdle rate. That factor is important because the risk of wrong hurdle rate determination is mitigated. 4. The rate of return is usually a rough estimate The required rate of return is usually a rough estimate that is made by managers. The advantage of using IRR is usually not based on the required rate of return. After the IRR is found out, the rate can be compared with the hurdle rate. In an instance whereby the IRR and the required rate of return are largely apart, the managers can use that advantage because it would be easier for them to make estimates (Arnold, 2000, 47). Disadvantages of IRR 1. It ignores economies of scale The disadvantage of using the technique is the fact that it usually ignores the benefits that actually accrue from dollars. For example, in a scenario whereby there is a project that is worth $ 100000 with a rate of return of 20% and another project with a value of $1000 and a rate of return of 70%, there will be difference in the dollar benefit. The first project will yield a return of $20000 while the other will accrue a return equivalent to $700. However, when using the IRR method, it will rank the latter project as the first but it is however associated with minimal dollar benefit. That will be advantageous although the IRR of 70% is higher than 20%. 2. Impractical implicit assumption of reinvestment rate Analysis of a project by the use of IRR, the technique usually assumes that cash flows that are positive are usually reinvestment at IRR. If a project is discovered to be having an IRR that is low, it will reinvest the same at a low rate and if the project has a high rate of return, it will assume that reinvestment will be done at the same high rate. That situation is usually not valid because at the time the investor receives the cash flows, there is a rare possibility of them having the same opportunities in terms of investments (Dasenbrock, 2000, pg 45). 3. Contingent or dependent projects In most instances, the managers are faced by situations that create a situation whereby the project that is been evaluated creates a compulsion in the investment of projects. For example, if a company investments in the sale of vehicles, the company has to also make arrangements for parking space. The IRR of investing in the business may be favorable; however, the additional cost of the parking space will make the project to be ruled out in a normal situation. 4. Projects that are mutually exclusive There are instances whereby investors are faced by projects that cannot be accepted altogether. In such situations, the decision on whether to invest in the projects is usually not totally important; the main challenge is usually to know the project that is best. Therefore economies of scale are ignored (Armstrong, 2001, pg 37). 5. Projects that have different terms In an example whereby 2 different projects are considered, one of the projects is estimated to have a useful life of 5 years and the other ends after 10 years. The first project has a potential of been reinvested after the end of the 5th year for 5 more years before the other project is completed. The aspect of a projects lifetime and the possibility of reinvesting is not considered in IRR technique. 6. A mixture of negative and positive cash flows in the future; In an instance whereby a project is associated with both negative and positive cash flows, the IRR of the project will most probably be satisfied by more than one rate of return and that means that there is no specific rate that will be arrived at (Alonso, 2002, pg 204). Bibliography Alonso, C. (2002). ‘Editors Column: Position Paper’, PMLA: Publications of the Modern Language Association of America. 201-06 Armstrong, N. (2001) ‘Whos Afraid of the Cultural Turn?’, Differences. Arnold, H. (2000). ‘Carpe Millennium: Niyi Osundares Seize the Day and African Literature and the Crisis in Post-Structuralist Theorising’, Anglophonia, 7. Brooker, J. (2002). ‘The Fidelity of Theory: James Joyce and the Rhetoric of Belatedness’, in Joyces Audiences. Dasenbrock, R. (2000). ‘Why There Are No Poststructuralists in Administrative Foxholes’, ADE Bulletin, Feldman, M. (2004). ‘"I Inquired into Myself": Beckett, Interpretation, Phenomenology’, Samuel Beckett Today/Aujourdhui,. Hall, G. (2002). Culture in Bits: The Monstrous Future of Theory ,London: Continuum. Hennelly, M. (2001), ‘Framing the Gothic: From Pillar to Post-Structuralism’, College Literature, 28. Jackson, A. (2001). ‘Multiple Annies: Feminist Poststructuralist Theory and the Making of a Teacher’, Journal of Teacher Education, 52. Lawrence, K. (2000). ‘Postpoststructuralist Administration: A Users Manual’, ADE Bulletin, 126. Miall, D. (1998). ‘The Form of Reading: Empirical Studies of Literariness’, Poetics, 25. Read More