Business Decision Making
Importance of Decision making in a Business
Decision making is considered to be very useful for a business. Decision making leads to the prosperity and success of the business. Decision making has always be an important part of business and good decisions always leads to good and successful business. Problems should be identified, assessed and evaluated to make a quality decision. Choosing among different alternatives and analysing the selected alternative is the main aim of a decision maker to make a business successful. In this report, a tour operator of UK has been selected “TUI Travels” tour operator who is organizing tour in various countries. This study aims at identifying the attitude and perception of the customers regarding the launching of tour operations at a new destination by using some survey methods and statistical tools and techniques. These tools and techniques are used to analyze the preferences of customers.
Primary sources are the first hand data collected by the the researcher. Primary data can be obtained by the researcher using survey methods, questionnaires, observation or by interview methods. In this study, TUI Travels is using both primary as well as secondary data to analyze the customer preferences as well as attitude regarding the new product launch i.e planning new destination for the tour. Primary sources mainly includes survey methods or questionnaire method which must be filled by the prospective customers. Customers fill the questionnaires and according to their perception tour operator plans exotic and customized destinations.
secondary sources can be defined as the data collected originally by someone else and not by the user. This data source is considered as the second hand data as it has already been collected. Secondary data can be collected by using past records, magazines, referrals, business journals, census methods, internet etc. in the current research, tour operator can collect secondary data by referring past sales records that is used to analyze what customers prefer, what are their needs and wants, what is their attitude towards trying a new destination etc. Tour operators should select the location according to the age group of the customers who are willing to visit.
Competitor products must be taken into consideration before selecting and launching a new product.
To assess the customers attitudes survey must be done by the tour operator on the basis of which destination can be launched. After all, for any tour operating agency, customized product must be the main aim. Questionnaires must be considered as the main instrument for analyzing the customer perception towards new tour product. Various e-questionnaire, online questionnaires can be used to survey for the new product launch. Sampling strategies must be used to make a survey of the customers.
Sampling can be defined as a statistical tool or a technique to determine the characteristics of some elements based on a larger population. Sampling technique is mainly used by the tour operator because as TUI Travels is a diverse tour agency operating in UK so it becomes very difficult for them to make a survey of large number of customers. Therefore, sampling technique is used so that on the basis of some elements, attitude or preferences of the whole population can be determined.
Quantitative data is to be used by the tour operator as quantitative data refers to measuring facts, figures and numbers. In the present study, tour operator must consider quantitative data as they must ask to the customers about the prices they are ready to pay for the new tour product launch. Price decision must be taken by the tour operator before launching any new product. It may also include qualitative data as questionnaire method is used and qualitative data is concerned with the human behavior and attitudes. This factor is analyzed by the qualitative data. Therefore, tour operator can consider quantitative as well as qualitative data for assessing the attitude of the customers.
As per the raw data collected, it can be interpreted that the average of the quarters of the four years is 351.66. It can be evaluated from the data that mean is necessary to be calculated that it helps the researcher to inference better information. As mean is based on all observations so it gives accurate information about the project. It is unbiased as it includes all the elements of data.
TUI Travels tour operating agency has a large numbers of customers that's why it is adopting sampling technique which in turn helps the tour operator to find out mean because mean can be calculated on finite data. As per the data, it is observed that people mostly prefer to travel in the first quarter and not in the later quarters. Median is also evaluated and it is the middle element of the whole data which is 342. median the central element and not at all affected by the terminal values. It helps in assessing the overall profitability of the tour operator and also shows the trend of the sales records.
Decision maker also considers measures of dispersion such as range, standard deviation, semi interquartile range.
It can be defined as the amount of variation from the set of data. It helps the analyst in decision making as it is very less affected by the variations in the data. It is also not at all affected by the terminal values. The higher the value of the standard deviation, the greater the variation from the mean value.
It can be defined as the difference between the upper limit and the lower limit values. It helps in decision making as to in which range the tour operator should operate. Thus, it specifies the limit in which he has to work.
It is a measure of statistical variation in which data is divided in four equal parts accordingly rank is given. This is also a decision making tool as half of the data values are divided making it easier to make decisions.
As per the statistical and quantitative measures of dispersion, it has been evaluated that standard deviation is very much deviated from the mean value. Standard deviation is most widely used measure of dispersion by the decision makers. Standard deviation is closely linked with the mean and due to this, it is greatly affected by the mean values.
Whole data is divided into four equal parts and it is used in decision making as it divides the vast data into equal parts and it is easier to make decisions.
Each of the 100 equal groups can be divided from the entire dataset. It also aids in decision making as entire data is divided making it easier to make decisions.
It can be defined as the statistical relationship between two or more variables. It always lies between +1 and -1. It is helpful in decision making as it defines the link between the variables which helps the decision maker to identify the tour packages and also identify the attitude and perception of customers.
It can be defined as a database in which all the financial information of the company is organized so that it helps the management to operate as well as it supports decision making in the organization.
This system is very much important in collecting and storing information related to the management for efficient and effective functioning of the business. This computerized system is adopted by TUI Travels as vast amount of information is available on the websites so this database helps in managing the information and helps reducing the overload of the information.
This system is adopted by most of the travel agencies so as to bring coordination among its activities and this system helps the tour operators to store, assemble, retrieve the data stored in the computer.
This is also a type of information processing tool. It helps to manage the business transactions and it also involves gathering, storage, retrieval of the data. This system is used by TUI Travels tour operator as this system has a greater advantage of reliability of data.
It is considered another type of information processing tool in which all the reports or the summary related to the levels of the management can be accessed such as accounting, human resource, marketing, production and operations.
This is a tool used for information processing and mainly used by the middle and top management. This system helps in solving a problem and decision making. Raw data is used which is to be compiled by the top and middle level managers so as to make it a useful data.
TUI Travels uses this system as decision making is a main aspect of tour agency for launching a new product.
Pay back period is a method of capital budgeting. It is considered as a tool to analyze the duration or a time period required to recover the initial investment of the project. It helps the tour operating agency to identify in what time they will be able to recover the cost of investment. It helps the tour operator not to face liquidity problems and it is very simple to calculate.
It is a popular capital budgeting technique which determines the profitability of the project. Here TUI Travels is adopting net present value method. NPV= present value of cash inflow-present value of cash outflow. Decision rule is if net present value is positive, then the project is accepted but if it comes out to be negative then the project is rejected.
It is also a method of capital budgeting which is rarely used by the managers for decision making. It helps in assessing the overall profitability of the investments. Internal rate of return is a discounting rate which can be calculated using the above formula.
If the internal rate of return exceeds the required rate of return then the project is accepted and if the internal rate of return is lower than the required rate of return then the project is said to be rejected.
From this report we learn Importance of Descesion Making an a Business. And Various Source of primary and secondary data for the development of new tour product. Choosing among different alternatives and analysing the selected alternative is the main aim of a decision maker to make a business successful. This study aims at identifying the attitude and perception of the customers regarding the launching of tour operations at a new destination by using some survey methods and statistical tools and techniques.
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