b. decision repaired

Assignment on Business decision Making

ICON COLLEGE OF TECHNOLOGY AND MANAGEMENT

Assignment

On

Business Decision Making

Submitted To: Mr. Dan Sookun

Submitted By: Md. Shameem Ferdous

Student ID: 20034997

Word Count: 2,713

Md. Shameem Ferdous: ID No. 4997 of 23

A s s i g n m e n t o n B u s i n e s s D e c i s i o n M a k i n g

Table of Contents

Introduction..............................................................................................................................3

Snapshot of Northern Foods Plc..............................................................................................3

Answer Question 1...................................................................................................................4

Northern Foods Plc Products...................................................................................................4

Advantages and Disadvantages of Primary Data....................................................................6

Advantages and Disadvantages of Secondary Data................................................................7

Data Analysis Process.............................................................................................................7

Secondary data of Petroleum Consumption in UK...................................................................8

Primary Data Collection for Northern Foods Plc....................................................................10

Questionnaires for Northern Foods Plc..................................................................................11

Answer Question 2 and 3.......................................................................................................12

Forecast Revenue and expenses of Northern Foods Plc:.....................................................12

Sales Forecast of Northern Foods Plc in Graph....................................................................13

Profits Forecast......................................................................................................................14

Analysis of Raw Data from Questionnaires............................................................................14

Answer Question 4.................................................................................................................20

Data Analysis for Northern Foods Plc....................................................................................20

Conclusion.............................................................................................................................21

Reference...............................................................................................................................22



Introduction

As a management accountant of Northern Foods Plc, I am going to discuss briefly about the company. Northern Foods Plc began its business in 1937 as a family owned business and became Public Limited Company in 1956.

Snapshot of Northern Foods Plc

Year Activity

1937 Business started by Alec Horsley in Holme on Spalding Moor.

1942 Business registered as Northern Dairies

1956 Northern Dairies becomes a public company

1972 Company changes name to Northern Foods plc Acquired Park Cake Bakeries, Oldham and Smiths Flour Mills

1977 Acquired Fox's Biscuit

1978 Acquired Pork Farms

1981 Acquired Dorset Chilled Foods

1991 Acquired Park Cake Bakeries, Bolton, Trafford Park Bakery, Kara Foods and Grain D'Or, Express Dairies, Eden Vale

2010 Appointment of Simon Herrick as Group Finance Director (appointed 4th January)Northern Foods commences in-flight meal contract with British Airways (March)Northern Foods announces proposed closure of Swansea ready meals site (Ethnic Cuisine) (April)Dalepak Frozen Foods sold to Irish Food Processors Group (August)

Announcement of proposed merger between Northern Foods and Greencore Group to create Essenta Foods (November)

Announcement of Stefan Barden's departure as Chief Executive; Simon Herrick as Acting Chief Executive; Steve Henderson as Acting Chief Financial Officer (November)

Table 1.0: Snapshot of Northern Foods Plc (Source: Northern Foods Plc, 2010)



Answer Question 1

Northern Foods Plc wants to expand its business to retail petroleum products such as unleaded petrol and diesel. Therefore, they need some market research about the demands of petroleum products among vehicle owners and drivers.

Northern Foods Plc Products

1. Chilled

2. Bakery

3. Frozen

Table 2.0: Northern Foods Plc Products

Northern Foods Plc needs to investigate how many customers pass through their shop and eventually buy petroleum from them.



According to Burt et al (2009) data can be as follows;

Figure 3.0: A typology of data sources (Source: Burt et al, 2009)

Therefore, data can be categorised by two types which are;

Figure 4.0: Types of data


Data

Archival (Available)

Internal External

To be collected

Survey

Observation (Field Study)

Personal Interview

Telephone Interview Questionaire Web Based

Experimental

Data

Primary Data

Secondary Data


Definition Reference

Data Data is simply a scientific term for facts, figures, information and measurement.

Burt et al (2009)

Internal Data

Data available from existing records or files of an organisation undertaking a study are data from internal source.

Burt et al (2009)

External Data

Data obtained from an organisation external to the institution undertaking the study are data from external source.

Example: Measuring, Counting, Assessing, Interviewing, Sketch Mapping, Taking Photographs etc.

Burt et al (2009)

Primary Data

Primary data are obtained from the organisation or institution that originally collected the information.

Original information collected in hand by field work.

Example: Government Census data, Text books, Local newspapers, Leaflets, Maps, Web sites etc.

Burt et al (2009)

Payne (2005)

Secondary Data

Secondary data are data that obtained from a source other than the primary data source.

Information from published sources which was collected by someone else.

Burt et al (2009)

Payne (2005)

Table 5.0: Sources of data

Advantages and Disadvantages of Primary Data

According to Stevens (2006) advantages and disadvantages of primary data are as follows;

Data Advantages Disadvantages

Primary Data

Cost effective as it has to conduct by either questionnaire, survey or any other direct involvement with customers.

Data direct from the population in which the target of researcher fulfil their prospective.

Up to date data as it has to collect directly.

Able to solve specific problems of the

Huge number of data. Sometimes dates are too much to interpret.

Possibility of miss interpreting

Expensive to conduct primary data.

Possibility of backfire if conducted and analysed wrongly.



researcher.

Table 6.0: Advantages and Disadvantages of Primary Data

Advantages and Disadvantages of Secondary Data

According to Stevens (2006) advantages and disadvantages of secondary data are as follows;

Data Advantages Disadvantages

Secondary Data

Low cost: a secondary data is low cost as it is available with a little cost or sometimes free.

Speed: Secondary data are speedy as it is almost ready to use.

Availability: it is available Flexibility: secondary

data are flexible.

Secondary data are poor fit to a specific problem.

Shortage of accuracy in terms of collecting data.

Age of the data is not justifiable as old secondary data may not be applicable any more.

Secondary data are flexible but not suitable for an organisation`s specific problems.

Table 7.0: Advantages and Disadvantages of Secondary Data

Data Analysis Process

Data analysis process can be described as;



Figure 8.0: Data Analysis Process (Source: Business Research Process, 2010)

Secondary data of Petroleum Consumption in UK

Inland petroleum consumption in UK Product Demand

Figure 9.0: UK Inland Petroleum Consumption (Source: UKPIA, 2010)

According to the figure petroleum consumption in the UK is not so stabilised but demands are quite high. So Northern Foods Plc has good reason be successful in this field.

Figure 10.0: UK product demands (Source: DECC, 2010)

According to the figure, in UK diesel has the most demands followed by petrol, jet fuel, petroleum etc.

The majority of oil product demand comes from the transport sector.UK refineries have been unable to produce enough jet fuel or diesel; consequently these are increasingly imported to meet demand.

Changes in Product Demand Road Fuels Sales



Figure 11.0: Changes in product demands (Source: DECC, 2010)

Figure 12.0: Road Fuels Sales (Source: DECC, 2010)

The major change in product demand since 1979 has been the decline of fuel oil demand and the growth of transport fuels

Since 1990 demand for petrol has fallen by over 30% and gas oil/diesel and jet combined have increased by over 50%

Natural gas has largely replaced fuel oil for power generation and gas oil for space heating

Whilst total road fuel sales have shown a long

term increase since 1970, they dropped slightly in both 2008 and 2009 due to a combination of higher prices driven by the cost of crude oil and the economic recession

Out of total sales, the share of petrol has been falling, whilst that of diesel has been rising due to an increased proportion of diesel vehicles

Petrol Sales Diesel Sales

Figure 13.0: Petrol Sales (Source: DECC, 2010)

Figure 14.0: Diesel Sales (Source: DECC, 2010)

Sales of petrol have been falling since reaching a peak of 33 billion litres in 1990 and in 2009 represented around 47% of road transport demand by litres sold

Sales of petrol were 22 billion litres in 2009.

This is the result of the increased popularity of diesel vehicles due to their high efficiencies, perceived lower running costs, and increased demand from commercial vehicles

However, diesel sales fell slightly and continued to stagnate into 2009 due to high diesel prices and the economic situation.

Forecast Demand for Road Travel until 2025



Figure 15.0: Demand for Road Travel (Source: DTF, 2010)

Road transport demand has been on an upward trend for decades, and despite a flattening in growth during the recession, demand is forecast to increase in future By 2025 demand is predicted to have grown by almost 60% from 1990 levels, although at a slightly lower rate than past decades.

According to the above mentioned secondary data it is clear that petroleum consumption in UK is in mature stage and will continue to increase as days go on. As for Northern Foods Plc, their main target will be transport industries fuel consumption including cars, vans, Lorries and other vehicles.

Primary Data Collection for Northern Foods Plc

According to the secondary data analysis it is confirm that Northern Foods Plc`s target market for Petroleum products will be transport vehicles including private vehicles. Therefore, they need to conduct research among the drivers of those vehicles.

Northern Foods Plc will interview drivers using questionnaires.

Questionnaires

According to Payne (2005) questionnaires are excellent source of primary data and can be used to obtain information about;

People`s habits People`s views and People`s opinions

Questionnaires are not just asking questions but appropriate questions according to the purpose of the questionnaires.



Questionnaires for Northern Foods Plc

Q1. What is your Age and Occupation?

18 - 25 26 - 35 36 - 45 46 +

Occupation:

Q2. Do you use your car/van/lorry/bus every day?

Yes No

Q3. How often do you use vehicles for travelling around or for job purpose?

Week days Weekends both

Q4. How often do you buy petroleum in a month?

4 – 6 times 7 – 9 times

Q5. How often do you buy petroleum from here monthly?


Q6. How much money do you spend in a month for petroleum?

100 -200 201 - 300 301 - 400 401 - 500

Q7. Do you buy petroleum from any specific place or randomly as you need?



Specific place Randomly

Q8. Do you see advertisement to buy petroleum?

Yes No

Q9. How many vehicles pass through the road per day?

Morning and Evening Peak Hours Morning and Evening Off peak hours

Q10. How much a petrol pump sells every day?

£1000-£2000 £2001 - £ 3000 £3001 - £4000

Q12. Will you consider buying petroleum from here if petroleum becomes available here?

Yes No Undecided

Table16.0: Designed Questionnaire

Answer Question 2 and 3

Forecast Revenue and expenses of Northern Foods Plc:

Open

£

January

£

February

£

March

£

Income

Sales 6,500 6,500 7,000

Capital In 25,000

Total Income 25,000 6,500 6,500 7,000

Finances/Assets

Loan Repayments 240 240 240

Interest Paid 70 70 70

Total Finances/Assets 310 310 310

Direct Costs

Materials 100 100 130

Direct Labour 200 200 330

Total Direct Costs 300 300 460



Expenses

Salary 400 400 400

Office Rent 150 150 150

Telephone 120

Utilities 110

Insurance 150

Total Expenses 670 700 660

Opening Balance 25,000 30,220 35,410

Total Income 25,000 6,500 6,500 7,000

Total Outgoings 1,280 1,310 1,430

Net Cash Flow 25,000 5,220 5,190 5,570

Ending Balance 25,000 30,220 35,410 40,980

Table17.0: Forecast Revenue and expenses of Northern Foods Plc

Sales Forecast of Northern Foods Plc in Graph

According to the forecast of the company`s three months sales are as follows;

January February March£6,200

£6,300

£6,400

£6,500

£6,600

£6,700

£6,800

£6,900

£7,000

£7,100

£6,500 £6,500

£7,000

Sales (£)

Sales (£)

Figure 18.0: Sale Forecast in Column Graph




£6,300

£6,400

£6,500

£6,600

£6,700

£6,800

£6,900

£7,000

£7,100

Sales (£)

Figure 19.0: Sales Forecast in Line Graph

According to the sales forecast it is believed that in the month of January and February the sales will be consistently same may be because of cold weather where drivers do not want to go out. And from March the sales are slightly high due to upcoming summer.

Profits Forecast

According to the forecast of the company`s three months profits are;


£5,100

£5,200

£5,300

£5,400

£5,500

£5,600

Profits (£)

Profits (£)

Figure 20.0: Profits Forecast in Scatter

The scatter shows the profits forecast of Northern Foods Plc in where the profits are expected to be increase from March might be due to the upcoming summer.



Analysis of Raw Data from Questionnaires

Northern Foods Plc`s main customers will be drivers from various vehicles. Therefore, 150 driver`s interviews were taken from around the shop to know who are most frequent.

Bus Drivers Lorry Drivers Car Owners Van Drivers0

10

20

30

40

50

60

70

Figure 21.0: Amount of Drivers

According to the graph the most frequent drivers are car owner who pass through the area most and will be the major customers for Northern Foods Plc.

Q1. What is your Age and Occupation?

18 - 25 26 - 35 36 - 45 46 +

Occupation:

23%

41%

26%

10%

Percentage of people

18 - 25 years

26 - 35 years

36 - 45 years

46 + years

23%

41%

26%

10%

Percentage by profession

Student

Professinal

Drivers

Self Employed

Figure 22.0: Percentages of People Figure 23.0: Percentages of People by profession



According to the graphs 41% is the highest percentages of people who are professional aged 26-35 years and use their vehicles frequently.

Q2. Do you use your car/van/lorry/bus every day?

Yes No

Q3. How often do you use vehicles for travelling around or for job purpose?

Week days Weekends both

Every Day Week days Week Ends

Yes 45 117 125

No 105 33 25

10

30

50

70

90

110

130

Uses of vehicles

Figure 24.0: Uses of vehicles per week

The graph shows weekly uses of vehicles by its owners/drivers. Only 45 out of 150 people use their vehicles everyday followed by 117 and 125 in week days and weekends.

Q4. How often do you buy petroleum in a month?


Q5. How often do you buy petroleum from here monthly?




4 - 6 Times 7 - 9 Times

No. of People

52 98

1030507090

110

Frequency of Buying

Figure 25.0: Frequency of Buying Petroleum in a Month.

57%

43%

Percentages of BuyingInstore

4 - 6 Times 7 - 9 Times

Figure 26.0: Percentages of Buying In store

The figure shows most of the people normally buy petroleum 7- 9 times in a month.

The graph shows around 57% of people will buy petroleum from Northern Foods Plc 7 – 9 times in a month and 43% of people will buy 4 – 6 times.

Q6. How much money do you spend in a month for petroleum?

100 -200 201 - 300 301 - 400 401 - 500

Figure 27.0: Line Graph


£100 - £200 £201 - £300 £301 -£ 400 £400 -£ 5000

10

20

30

40

50

60

No. of People

Amount Of Money

No

. o

f P

eop

le


According to the graph a large portion of people spend between £301 - £400 pound for petrol who are mainly professional and the second large portion spend £100m- £200 who are mainly students.

Q7. Do you buy petroleum from any specific place or randomly as you need?

Specific place Randomly

Q8. Do you see advertisement to buy petroleum?

Yes No

Specific Place Randomly0

102030405060708090

100

Figure 28.0: Column Graph

Yes40%

No60%

Figure 29.0: Column Graph

The graphs show most of the people buy petrol randomly when they need it and their possibilities of buying petroleum from Northern Foods Plc is rare. About 40% of people buy petroleum most of the time from specific place and their possibilities of buying petroleum from here are very high.

Q9. How many vehicles pass through the road per day?

Morning and Evening Peak Hours Morning and Evening Off peak hours



Morning and Evening Peak Hours

Morning and Evening Off peak hours

50 150 250 350 450 550 650 750

Morning and Evening Peak Hours

Morning and Evening Off peak

hours

Amount of Vehicles

720 450

Figure 30.0: Bar Chart

According to the bar chart about 720 vehicles passes through the store during morning and evening rush hours where 450 passes through off peak time. The data was collected on a particular day at the store from early morning to midnight.

Q10. How much a petrol pump sells every day?

£1000-£2000 £2001 - £ 3000 £3001 - £4000

£1000-£2000 £2001 - £ 3000 £3001 - £4000

Days 2 3 2

0.25

0.75

1.25

1.75

2.25

2.75

3.25

Figure 31.0: Scatter Graph

According to the scatter graph the particular petrol pump sells £2000 - £3000 on average. The data was collected in a petrol pump last whole week based on their petroleum sells and then divided to get per day average sell.

Q11. Will you consider buying petroleum from here if petroleum becomes available here?

Yes No Undecided



47%

19%

35%

Yes No Undecide

Figure 32.0: Pie Chart of Possible Buyer`s Percentages

About 46 % of people said yes to buy petroleum from the store where 35% said direct no may be because of the distance from their home of work place. 19% said they are undecided yet but in future they might buy from here as well.

Answer Question 4

Data Analysis for Northern Foods Plc

There are few steps before making any business decisions which are as follows;

Figure 33.0: Data Analysis Process (Source: Business Research Process, 2010)

After gathering raw data and information from primary data, it needs to be analysed in where the knowledge will help to make decisions.

According to the gathered primary data it is clear that the main customers will be professionals followed by van and lorry drivers. Although the numbers of students are low, but will play an important role.


Raw Data

Information

Analysis

Knowledge

Decision Making


Among the professionals and drivers, both the group use their vehicles in weekdays most and buy a large portion of petroleum. And in summer time the trend is to go for outings when people use their vehicles.

Frequent petroleum buyers are not quite common but a large number of people buy petroleum when they need it normally 7-9 times in month.

Average people spend around £250 -£400 in a month for petroleum.

Less than 50% people buy petrol from specific place that are ready to buy petroleum from Northern Foods Plc if they open petrol pump. More than 50% people buy petroleum randomly when they need it.

46% people will buy petroleum from Northern Foods Plc (The People who buy petroleum from specific place) where 35% will not. But there are 19% of people who are undecided could buy from them.

From analysing the data it is believed that the management can make positive decision to add petroleum facilities for vehicles in their retail store.

Conclusion

Northern Foods Plc is a well established and progressive company in food retail market in UK and has a very proud history of success from the beginning in 1930s. Last few years it is passing through a difficult time like all other companies due to the global recession. Their sale has dropped slightly. After conducting the research it is concluded that introducing petroleum sale in store will be very progressive and well decided for the company.



Reference

Burt, J. E. et al (2009) Elementary statistics for geographers. 3rd edition. New York: Guildford Publications, Inc.

Business Research Process (2010) Business Research Process. [Online] Available at: http://www.dolcera.com/website_prod/knowledge-site-research-processes/business-research-process-approach. Last accessed 12th December 2010.

DECC (2010) statistical review. [Online] Available at: http://www.ukpia.com/files/pdf/ukpia-statistical-review-2010.pdf. Last accessed 12th December 2010.

DTF (2010) DfT Road Traffic Forecast 2008. [Online] Available at: http://www.ukpia.com/files/pdf/ukpia-statistical-review-2010.pdf. Last accessed 12th December 2010.



Northern Foods Plc (2010) History. [Online] Available at: http://www.northern-foods.co.uk/our-company/history.htm. Last accessed 12th December 2010.

Payne, D. (2005) Coursework Skills Companion for Geography GCSE. Oxford: Heinemann Educational Publishers.

Stevens, R. E. (2006) The marketing research guide. 2nd edition. Binghamton: The Haworth Press, Inc.

UKPIA (2010) statistical review. [Online] Available at: http://www.ukpia.com/files/pdf/ukpia-statistical-review-2010.pdf. Last accessed 12th December 2010.


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