Analytical Skills for Business - Assignment Example

Analytical Skills for Business Name University Module Instructor Submission Date © 2012 INTRODUCTION Being in possession of astute analytical skills is fundamental to a business owner. McDaniel and Gates (2007) observe that forward-looking businesspeople are ever prepared to face the challenges of making business-defining decisions. According to the views of McDaniel and Gates (2007), these people have sound analytical skills which they keep on improving regularly. Study findings as forwarded by Mulaudzi (2006) and McDaniel and Gates (2007) underline the importance of having good analytical skills in any business venture. In this they include the fact that analytical skills form “the fundamentals of good decision-making skills which in turn allow business owners to analyse critically situations affecting their businesses”. Additionally, analytical skills are also found to be a crucial component of the managerial ability deemed necessary in the running of a business. A business owner therefore needs to have the ability to realize complex issues surrounding the business environment for purposes of predicting the best action of advancing the business (McDaniel and Gates, 2007). It is for this reason that analytical skills become very necessary in certain areas of business functions that call for sound planning. Finally, analytical skills help business people to be more objective in their decision making rather than using their intuitions. The present report therefore aims to demonstrate the significance of having sound analytical skills in running businesses. The report is presented by addressing some questions listed hereunder and terminates in a befitting conclusion. QUESTION 1 Presented below is a set of raw data showing the length of life (in hours) of a sample of forty eight 100-watt light bulbs produced by a manufacturer. 687 697 723 773 824 825 834 835 851 852 855 858 862 860 871 870 879 888 896 899 908 909 915 913 925 924 929 926 941 939 942 943 949 954 974 972 975 977 987 1,005 1,016 1,014 1,019 1,041 1,055 1,080 1,096 1,094 a) Constructing a frequency table based on the presented raw data using a reasonable number of class groupings came up with the five classes as indicated in Table 1 below. Table 1: Frequencies and percentages for the length of life in hours of forty eight 100-watt light bulbs (n = 48). Length of life (Hrs) Frequency % 600-699 2 4.2 700-799 2 4.2 800-899 16 33.3 900-999 19 39.5 1000-1099 9 18.8 b) Drawing a histogram of the frequency distribution was done using the highlighted variables shown in Table 1 above. Figure 1: A histogram of the frequency distribution for the length of life of forty eight 100-watt light bulbs c) Considering the data presented by both the Table and the Figure, it is clear that the 100-watt light bulbs had relatively long hours of life. Forty-four light bulbs, representing 91.6% had long life length of between 800 and 1,099 hours while only a paltry 8.4% had life length of between 600 and 799 hours. In my views, I tend to favour the argument that this particular manufacturer was producing long life 100-watt light bulbs and was destined to remain in business for long. QUESTION 2 Sales of 2010 model light trucks and sport utility vehicles for the Ford Motor Company far outpaced their 2009 counterparts according to a Wall Street Journal article. Table 2 below indicates unit sales for selected vehicles for March 2009 and March 2010. Table 2: Unit sales for selected vehicles for March 2009 and March 2010 Model March 2010 March 2009 Ranger 45,481 26,297 Mustang 18,050 13,328 Fusion 20,908 16,714 Explorer 39,314 35,063 Taurus 34,358 32,404 Lincoln Continental 4,084 3,202 a) Constructing a visual representation of unit sales for selected vehicles for March 2009 and March 2010. My selected visual representation is a histogram illustrated in Figure 2 below. Figure 2: A visual representation of the unit sales for selected vehicles for March 2009 and March 2010 b) Discussing the changes in the distribution of sales between March 2009 and March 2010 as illustrated above indicates that there was a general increase in unit sales for all categories of vehicles. The Ranger posted the highest increase of almost a double from the previous year followed by the Explorer and the Taurus. These vehicles seemed to be most popular with users because they sold the largest units over the study period. The Lincoln Continental and the Mustang were least popular as they recorded the least unit sales. QUESTION 3 A manufacturer of flashlight batteries took a sample of 25 batteries from a day’s production and used them continuously until they were drained. The numbers of hours they were used until failure were indicated in the set of raw data below 347 434 329 557 279 454 1,055 640 267 507 291 926 437 778 409 377 1,110 553 666 761 424 826 771 576 407 a) Computing arithmetic mean, median, first quartile, and third quartile of the provided data requires that the raw data be arranged first in a series starting with the least value to the greatest as shown: 267; 279; 291; 329; 347; 377; 407; 409; 424; 434; 437; 454; 507; 553; 557; 576; 640; 666; 761; 771; 778; 826; 926; 1,055 and1, 110. Calculating arithmetic mean is done by using the method shown below. Arithmetic Mean=267+279+ 291+329+347+377+407+409+………………. +1,110 25 =14181 25 =567.24 The Median is literally the value in the middle of distribution data and is used as a measure of central tendency (Mulaudzi, 2006). The Median value of the data provided is 507 as it is in the middle of the distribution divides the series into two groups of equal population (Mulaudzi, 2006). The first quartile is the value that is at the 25% mark in the distribution, while the third quartile is the value at the 75% mark. From the data above, the first quartile is 377 and the third quartile is 761. b) In explaining the ways in which the arithmetic mean and the median computed above would be useful to the manufacturer, it is important for the manufacturer to understand that most of the batteries had over 500 hours of life before becoming completely drained. This is indicated by an arithmetic mean of 567.24 and a median of 507, where both are measures of central tendency (Mulaudzi, 2006). For this reason, the manufacturer should make batteries that have more than 500 hours of life if any meaningful business has to be maintained. c) In computing the standard deviation, range and inter-quartile range of the provided data, it is important to use appropriate methods. The Standard Deviation of the set (267; 279; 291; 329; 347……………….1, 110) is computed and found to be 142.66. The range of a series of numerical data is the difference between the maximum and minimum values of that series (Creswell, 2003). The range for the data under study is 843 obtained by subtracting 267 from 1,110. The inter-quartile range on the other hand is computed by subtracting377 from 761 to obtain 384. d) the accuracy of the statement made by the manufacturer in the advertisement ‘batteries produced by our company should last 400 hours’ is evaluated by using the information gained from questions a) and c) is thus found to be true because the batteries have a life length of over 500 hours. This is shown by the Mean, Median and inter-quartile range of 567.24, 507 and 384 respectively which are close to 400 hours. The Standard Deviation of 142.66 is somewhat misleading as it appears to be too large. e) In my view, I would recommend a cut-off point of 377 hours because this value falls at the first inter-quartile and is also close to the Median value and the Mean. When these values are considered together, they seem to have a great deviation of about 190.24 (567.24 - 377). This is far much larger than the computed S.D and as such the cut-off should not exceed 472 hours. QUESTION 4 The manager of the Clark Fork Restaurant recently selected a random sample of customers to find out how long the customers were required to wait before they were served dinner. This study showed that some customers complained that their wait time was unduly long and it seemed that the restaurant intended to keep people waiting in the lounge to increase the lounge business. The records were sorted and presented in Table 3 below. Table 3: Cumulative Frequency Waiting time in minutes Internal midpoints Frequency Cumulative Frequency 10-15 12.5 10 10 15-20 17.5 17 27 20-25 22.5 26 53 25-30 27.5 16 69 30-35 32.5 18 87 35-40 37.5 11 98 a) Calculating the mean and standard deviation of waiting time for this sample will be necessary to use the midpoint values shown in Table 3 above. The Mean of 12.5; 17.5; 22.5; 27.5; 32.5 and 37.5 is computed as 25 while the Standard Deviation is 5.38. b) Drawing a cumulative frequency chart (OGIVE) from the data in Table 3 above and then determining the value of the median. Figure 2: A cumulative frequency chart The Median of these data is 25 (22.5 + 27.5) because the series is an even distribution. 2 c) If the waiting times of these customers all increased 20%, the new mean and standard deviation will be 30 and 6.46 respectively. d) The answers to questions a) and c) above indicate a direct proportionality in that an increase in the waiting time of customers will translate to an increase in their mean and Standard Deviation. The reverse is also true. e) Since the waiting time for customer increases due to delays in the service by hotel staff, the manager needs to consider employing more staff to reduce the delays occasioned by slim workforce. Additionally, the manager may consider automating some of the operations in the hotel. QUESTION 5 a) There are a number of sampling methods that can be used to ensure that the population used in the survey is truly representative. Getting the information about the type of tourists who visit the area from the information desk will be the first step. From this information, stratified random sampling can be done by sending the questionnaires to the identified subjects to complete and return for analysis. b) Designing a brief questionnaire with four questions 1. What is your gender? Male Female 2. Which gender is more likely to visit Tourist destinations? a) Males b) Females c) Males and Females equally d) None of the above 3. What is your opinion about the future of the tourism industry? 4. Please refer to this “Five Point Satisfaction Scale GUIDE” in answering the questions that follow. Very Satisfied….1 Satisfied.……2 Neutral……..3 Dissatisfied……4 Very Dissatisfied……5 To what degree are you satisfied with the services you receive?.................................1, 2, 3, 4, 5 c) Personal information collected about each respondent should include gender, age, marital status, religious affiliation and ethnicity or country of residence. The reasons for this piece of information will be to identify serious respondents as well as to establish potential breach to international security. d) Potential difficulties that are encountered while conducting the survey may include unwillingness on the part of the respondents to give very personal information. Also respondents may show some hostility due to having gone through the same process in the past. Some respondents are known to give biased information contrary to what the survey tool is requesting (Creswell, 2003). Lastly, time and monetary constrains may play a debilitating role. e) Other methods of information collection that could be used to enhance the findings of the questionnaire survey could include the face-to-face interviews which are the best given that the researcher can observe the respondents. Telephone interviews can also be conducted in addition to on-line surveys (Mulaudzi, 2006). CONCLUSION As established earlier, possession of analytical skills is beneficial to businesses. A proactive business owner is capable of analysing problem situations in the business and be able to make informed decisions. Additionally, the manager has the ability to understand complex issues surrounding the business and thus predict the best move that can be taken to advance the business. This is particularly so if the business owner is objective in decision making. This revelation has been clearly demonstrated by the questions contained in this report. Based on the results of this report therefore, it is in order to recommend that business owners need to retrain so as to advance their analytical skills for better management of their businesses. REFERENCES Creswell, J. W. (2003), Research Design: Qualitative, Quantitative, and Mixed Methods Approaches. 2nd edition. Thousand Oaks, California: Sage Publications. McDaniel, C and Gates, R. (2007), Marketing Research. 7th Edition. London: John Wiley and Sons Inc. Mulaudzi, T. R. (2006), Techniques in Research. New York: Pearson Publishing. Read More