Business Decision Making
Assessment Brief
Unit and Assessment Details
Course Title:
Unit Number:
Unit Title:
Assessor:
Internal Verifier:
Assessment Title:
HND Business
06
Business Decision Making
Syeda Sana Naseem
Bilal Ahmad
Assessment Method:
Assessing in:
Number of Words:
Outcomes Covered:
Report
Individually
4500 (Max 20 pages)
1(Outcomes 4.4, 4.5)
Issue Date:
Pre-Submission Date:
Due Date:
Feedback to Learner
Date:
20-June-2011
27-June-2011, 04-July-2011, 11-July-2011
14-July-2011
18-July-2011
Use of software-generated information to make organizational
decisions
Statement of authenticity
College No.
Learner Name
Learner Signature
Learner’s Declaration: I confirm that the work submitted for this assignment is my
own.
Date
Outcomes Covered
OUTCOME
4
Use software-generated information to make decisions at operational,
tactical and strategic levels in an organization
Criteria Grid
4.1
4.2
4.3
4.4
4.5
M1
M3
D3
Learner’s Comment
NOTE: Attach this page as first page of your report and the remaining pages at the
end of your report.
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Business Decision Making
Purpose and Aim
This assessment will give learners the opportunity to examine a variety of data
sources. For any of the given scenarios, they will collect data from different sources
by using variety of methods, and will use spreadsheets and other software for data
analysis and the preparation of information in an effective manner. Conclusions on
the basis of data analysis are required to clarify the importance and use of different
data analysis techniques. Three different scenarios are used for assessing this outcome
due to the problem of data unavailability. Mostly learners are not able to get financial
data from organization.
Scenario 1
Select any manufacturing or merchandizing organization of your own choice that is
using Management Information System for making different decisions at different
organizational levels. Few organizations are given below:
i.
Shopping Store (Chen-one, Wadood Sons, J’s Emporium, Jans Arcade,
CSD)
ii.
Franchise (Utility Stores, K&N, Rahat Bakers)
Task 1
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Investigate the Information system used by the selected organization and
identify different problems that can occur at different organizational levels.
Analyze different management information systems and suggest appropriate
Information Processing Tools / Systems for operational, tactical and strategic
levels of the given organization that would serve the company’s needs.
(Outcome 4.1)
Give valid and justified reasons for the suggested Information Processing
Tools / Systems according to the problems identified and the context of the
given organization. (M1)
Review and evaluate inventory control systems in the given organization and
identify the problems faced by the management in inventory management.
Guidance Notes for Task 1
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Page 2
While investigating the information System and Inventory Control System
conduct proper research to identify any problem or shortcoming in the existing
systems.
Problems should be justified by giving clear explanation of each problem.
Reasons for the suggested Information Processing Tools without proper
justification will not be accepted for M1.
This task should be completed by 27 June, 2011. This is the pre-submission
date for feedback related to Task 1.
Business Decision Making
Scenario 2
Zhou Bicycle Case Study 1
Zhou Bicycle Company, located in Seattle, is a wholesale distributor of bicycles and
bicycle parts. Formed in 1991 by University of Washington Professor Yong-Pia Zhou,
the firm's primary retail outlets are located within a 400-mile radius of the distribution
center. These retail outlets receive the order from ZBC with 2 days after notifying the
distribution center, provided that the stock is available. However, if an order is not
fulfilled by the company, no backorder is placed; the retailers arrange to get their
shipment from other distributors, and ZBC loses that amount of business.
The company distributes a wide variety of bicycle. The most popular model, and the
major source of revenue to the company, is the AirWing. ZBC receives all the models
from a single manufacturer in China, and shipment takes as long as 4 weeks from the
times an order is place. In extreme unfavorable conditions the shipment can take 2
weeks time period as well. With the cost of communication, paperwork, and customs
clearance included, ABC estimates that each time an order is place, it incurs a cost of
$65. The purchase price paid by ZBC, per bicycle, is roughly 60% of the suggested
retail price for all the styles available, and the inventory carrying cost is 1% per month
(12% per year) of the purchase price paid by ZBC. The retail price (paid by the
customers)
for
the
AirWing
is
$170
per
bicycle.
ZBC is in interested in making as inventory plan for 2011. The data collected for the
past 2 years are summarized in the following table. A forecast for AirWing model
sales in 2011 has been developed and will be used to make an inventory plan for
ZBC.
DEMAND
MONTH
JANUARY
FEBRUARY
MARCH
APRIL
MAY
JUNE
JULY
AUGUST
SEPTEMBER
OCTOBER
NOVEMBER
DECEMBER
FOR
2009
6
12
24
46
75
47
30
18
13
12
22
38
343
AIRWING
MODEL
2010
FORECAST FOR 2011
7
14
27
53
86
54
34
21
15
13
25
42
391
8
15
31
59
97
60
39
24
16
15
28
47
439
Sturdivant Sound Systems Case Study 2
Sturdivant Sound Systems manufactures and sells sound systems for both home and
audio. All parts of the sound systems, with the exception of CD players, are produced
in the Rochester, New York, plant. CD players used in the assembly of Sturdivant's
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Business Decision Making
systems are purchased from Morris Electronics of Concord, New Hampshire. Mostly
the order is received 3 to 7 days after the order is placed.
The purchasing agent for Sturdivant Sound Systems submits a purchase requisition
for the CD players once every four weeks. The company's annual requirements total
5,000 units (with standard deviation of 10%), and the cost per unit is $60. (Sturdivant
does not purchase in greater quantities because Morris Electronics, the supplier, does
not offer quantity discounts.) Rarely does a shortage of CD players occur because
Morris promises delivery within one week following receipt of a purchase requisition.
(Total time between date of order and date of receipt is 10 days).
Associated with the purchase of each shipment are procurement costs. These costs,
which amount to $20 per order, include the costs of preparing the requisition,
inspecting and storing the delivered goods, updating inventory records, and issuing a
voucher and a check for payment. In addition to procurement costs, Sturdivant Sound
Systems incurs inventory carrying costs (aka Holding Costs) that include insurance,
storage, handling, taxes, and so forth. These costs equal $6 per unit per year.
Professional Video Management Case Study 3
Ever since the introduction of the first home video systems for television, Steve
Goodman has dreamed about manufacturing his own video system for professionals.
One of the best features of Steve's professional video system is the price. The basic
system, including the control box, both video systems, the video disk, and the
television system, has a retail price of $1,995.
Steve found manufacturers for the television system, the control box, and the video
disk system in the United States. Because videotape systems are more popular, Steve
had more choices. After extensive research, he was able to eliminate all of the
potential suppliers but two. Both of these suppliers are Japanese companies. Toshiki is
a new company located outside of Tokyo, Japan. The other Japanese supplier is Kony.
Although Kony originally started in Japan, also outside of Tokyo, it now has offices
and manufacturing facilities around the world. One of these manufacturing facilities is
located less than 100 miles north of Atlanta, Georgia.
Because Kony has manufacturing facilities located in the United States, the cost to
place an order and the delivery time are much more favorable than they are with
Toshiki. The estimated per order cost from Kony is $40, and the expected delivery
time is 1 month. On the other hand, the ordering cost is higher and delivery time is
longer for Toshiki. The additional paperwork and problems associated with ordering
directly from Japan would increase Steve's cost to $90 per order. Furthermore, the
delivery time for Toshiki is three months. Steve estimates that his carrying cost would
be 30 percent. This is due primarily to storage and handling cost as well as the
potential for technological obsolescence. For the first year or so of operations, Steve
decided to sell only the basic unit: the control box, the television set, the video disk,
and the two videotape systems. The demand for the complete system was fairly
constant during the past six months. Expected June sales are 7,970; July sales are
8,070; August sales are 7,950; and September sales are 8,010. This demand pattern is
expected to continue for the next several months.
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Business Decision Making
For any one of the given case studies complete the following tasks:
Task 2
•
•
•
Collect information and compute all the necessary control levels for proper
inventory management for making a spreadsheet to be used for material
requirements planning. (Reorder level, Min level, Max level, EOQ)
Prepare a spreadsheet to enable material requirements planning and calculate
economic order quantities to assist the inventory management of the given
organization.
Explain the use and functioning of this spreadsheet for material requirement
planning.
Guidance Notes for Task 2
•
•
•
•
Clearly show all the data and the calculations used for making the spreadsheet.
Provide soft copy of the spreadsheet along with the assignment and also
include its snapshot in the report when explaining the functioning of MRP
spreadsheet.
Learner should use the data given in all the three case studies to test the
prepared spreadsheet.
This task should be completed by 04 July, 2011. This is the pre-submission
date for feedback related to Task 2.
Scenario 3
Follow the scenario given in Assignment Brief 1 and suppose that the research
executive of your marketing agency wants you to make a rough plan for the
project which was selected by you previously.
When you were working on the analysis of your selected organization, the R&D
department of your agency was assessing the costs and benefits of each project to
be used for evaluating the viability of projects in financial terms. The R&D
department had come up with following forecasted costs and returns of each
project. As you have some previous knowledge and experience of working as a
finance advisor, you are asked by the Research Executive to assess the viability of
each project and present a report to the upper management. Estimated costs and
benefits of each project is given below:
Project1: The project will cost Rs. 20,000 and it is expected that an appropriate
website will cause increase students intake this will cause an increase in college’s
revenue. This increase is estimated to be Rs. 5000 in 1st two year after imensment
of the website, Rs. 6000 in next two years and Rs. 7000 for next three years.
Project2: The estimated cost of launching new product is Rs. 700,000 and the
new product will increase overall sales of the company to Rs. 100,000 in year 1,
Rs. 250,000 in year 2, Rs. 300,000 in year 3, Rs. 350,000 in year 4 and Rs.
400,000 thereafter through year 10.
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Business Decision Making
Project3: The overall estimated cost of starting a new course at Edwardes is Rs.
680,000. The expected returns from this project will be Rs. 100,000 every session
(In 1 year there will be two sessions) for next 5 years.
Project4: This project will cost Rs. 404,424 and the revenue of the company will
increase to following: Rs. 86,890 in year 1, Rs. 106,474 in year 2, 91,612 in year
3, 84,801 in Year 4, Rs. 84,801 in year 5, Rs. 75,400 in year 6, Rs. 66,000 in Year
7 and Rs. 92,400 in year 8.
Project5: The project requires an initial investment of Rs.1,000,000 and the
returns will be in following pattern: Year1 - 250,000 , Year2 – 300,000, Year3 –
350,000, Year 4 – 450,000 , Year5 – 580,000 and in Year6 – 650,000.
Now you have to perform following tasks:
Task 3
•
•
•
Identify the main activities for your selected project and prepare a rough draft
of your project plan. Apply different scheduling techniques (Gantt chart and
network diagram) to determine the critical path for your project. (Outcome
4.4)
Your client has no idea about scheduling techniques and critical path analysis
therefore give your analysis and recommendations on the basis of above
activity so that the client can easily understand what it means. (M1)
Evaluate the financial viability of the each project and select the best project in
financial terms. For assessing viability of the projects different project
appraisal techniques use following techniques: Net present value, internal rate
of return, payback period and accounting rate of return. (Outcome 4.5)
Guidance Notes for Task 3
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Your plan should highlight the main activities, their duration and
dependencies clearly so that scheduling can be done properly by applying
networking techniques.
Clearly identify the critical path and mention the reason for why you have
selected it as critical.
For assessing viability of projects use all the project appraisal techniques that
can be applied. If learner is using only one technique then give reason why
that particular technique is used.
It is better to use Excel for applying project appraisal techniques. Learner can
also use online IRR and NPV calculators.
This task should be completed by 11 July, 2011. This is the pre-submission
date for feedback related to Task 3.
Resources Required:
• Lectures slides
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Business Decision Making
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Business Decision Making BTEC Course Book
Schultheis R — Management Information Systems 4th Edition (McGraw Hill 1998)
http://people.brunel.ac.uk/~mastjjb/jeb/or/invent.html
http://www.agribusinessmgmt.wsu.edu/ExtensionNewsletters/performance/IventoryMgmtControl.pdf
http://scm.ncsu.edu/scm-articles/article/economic-order-quantity-eoq-modelinventory-management-models-a-tutorial
http://www.exinfm.com/free_spreadsheets.html
Reference books (in library)
Business magazines and journals
Newspapers
Required Evidence
Grade Descriptor
Possible Evidence
Merit:
M1: Identify and apply strategies to find • Appropriate information systems are
appropriate solutions
identified
according
to
the
organization and their selection is
justified by giving clear and valid
reasons.
• Networking techniques are used
properly with clear reasons and
justifications provided.
M3:
Present
and
communicate • The report is well structured and the
appropriate findings
information is communicated in an
effective and proper manner to the
audience.
• Spreadsheet is prepared in proper
format and with proper labeling to
make it effective and user friendly.
Distinction:
D3: Demonstrate convergent/ lateral/ • Spreadsheets
prepared
and
creative thinking
suggestions related to information
system include different appropriate
alternatives which were provided by
student’s own thinking/research.
Notes to Students
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•
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Page 7
Include a last chapter in your report about the limitations of your report and
write any difficulty you faced while collecting data. Give conclusions and
critically evaluate your work if possible.
Give proper evidence of all your activities for completing the tasks e.g. videos,
pictures, visiting cards, or reference letter of personnel from whom data is
collected.
Clearly mention if any assumptions are undertaken for the given scenario.
Business Decision Making
•
•
Student could research together but you must analyse, evaluate and critically
appraise the requirements of your assignment and produce the work on your
own.
The safety of your assessments is your responsibility. You must not permit
another student access to your work.
Plagiarism Policy
The college has strict penalty for plagiarism and the assignment will be cancelled if
the assignment is observed for this.
The definition and scope of plagiarism are presented below:
Plagiarism occurs when a student misrepresents, as his/her own work, the work,
written or otherwise, of any other person (including another student) or of any
institution. Examples of forms of plagiarism include:
• The verbatim (word for word) copying of another’s work without appropriate
and correctly presented acknowledgement;
• The close paraphrasing of another’s work by simply changing a few words or
altering the order of presentation, without appropriate and correctly presented
acknowledgement;
• Unacknowledged quotation of phrases from another’s work;
• The deliberate and detailed presentation of another’s concept as one’s own.
All types of work submitted by students are covered by this definition, including,
written work, diagrams, designs, engineering drawings and pictures.
Grading Statement (For Report)
Pass
4.1: Review management information systems and suggest appropriate information
processing tools for operational, tactical and strategic levels of the organization
4.2: Review and evaluate inventory control systems in an organization
4.3: Prepare a spreadsheet to enable material requirements planning and calculate
economic order quantities
4.4: Prepare a project plan for an activity and determine the critical path
4.5: Use financial tools — discounted cash flow and internal rates of return (IRR
function) to evaluate the financial viability of proposed investments
Merit
M1: Identify and apply strategies to find appropriate solutions
M3: Present and communicate appropriate findings
Distinction
D3: Demonstrate convergent/ lateral/ creative thinking
General Instructions
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Business Decision Making
•
Books and online resources can be used of the college library and Central
Computer Lab for any assistance. But direct copying from these resources is
not allowed.
Visits need to be arranged and made to the organizations. For meeting the
respective managers, the college will provide a reference letter for the project
and the manager of the organization is welcome to contact the administration at
the college
The college has strict penalty for plagiarism and the assignment will be
cancelled if the assignment is observed for this.
Proper referencing should be given in the Harvard Style/Chicago/MLA etc.
All work should be comprehensively referenced and all sources must be
acknowledged fully, this includes books & journals used as well websites
visited. Details such as page numbers, publishers and publication year should
also be stated, in addition to the name of the author(s) and publication. Books,
articles and journals should be the main sources; online sources are allowed up
to 15%
The Assignment should have a cover page that has assignment title, assignment
number, course title, unit title, lecturer / tutor name and student’s name.
Attach all the pages of assignment brief with your report as annexure at the
end.
Ensure that statement of authenticity has been signed and attached as the first
page of your report.
Contents sheet (TOC) with a list of all headings and page numbers is must for
your report.
Use A4 page size, 12 point Arial or Times New Roman font with 1.5 line
spacing.
Your assignment should be word-processed and should not exceed 4500 words
in length (or 20 pages). Exhibits / appendices are outside this limit
Pages should be numbered (bottom right hand corner)
Spell-check the document and read thoroughly for grammatical errors
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Feedback to Learner
Criteria
Feedback to learner
(Evidence presented against the published criteria)
Achieved
Y/N?
4.1
Y/N
4.2
Y/N
4.3
Y/N
4.4
Y/N
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Business Decision Making
4.5
Y/N
2.3
Y/N
M1
Y/N
M3
Y/N
D3
Y/N
General
comments
Assessor signature
Date
Internal Verifier signature
Date
Internal Verifier
Page 10
Assessor