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Level: 6 Module: Business Analytic Assignment Code: LUBM303 Canvas & Jira/Web services Deadline: Tuesday 4th May 2021 by 2pm Contribution to module assessment: 100% Assignment Module Leader: John Opoku Learning outcomes. Upon successful completion of this module, students will have demonstrated: Knowledge Lo1. Improved knowledge in the collection and analysis of a variety of data. Lo2. Ability to uunderstand and interpret business problems including basic demand and supply analysis. Skills: S1. Critical thinking and analysis skills S2. Skills in data analysis and produce information in appropriate formats for decision making in an organisation context S3. Develop skills in using software generated information to make decisions at operational, tactical and strategic levels in an organisation. Requirements: You must answer any Three questions. Each question that is attempted will carry a maximum mark of 33 and 1mark for presentation. Word limit is 3,500. Question 1 Jonathan, operations manager of Milton Keynes farms limited (MKF Ltd.) lacks strong insight in any realistic business decision- making. However, he has been able to use the cost diagram below to illustrate and influence costing decisions in the company, MKF Ltd: According to Jonathan, his budgeted annual output is 180,000 units, fixed cost amount to £60,000, variable costs is £0.75 per unit and the sales price is £2.00 per unit. Required: a) Develop a mathematical model using the cost information above. (7 Marks) b). Calculate the profit or loss of MKF Ltd. using the above information. (6 marks) Draw a graph with a spreadsheet, for a five-year projection from January 2022 taking into consideration an annual expected increase of 8% in variable cost and 5% increase in both output and sales price (NB. The changes must take effect from 2022). (8 marks) d) Critically analyse and comment on the costing and revenue behaviour before and after your projections. (12 marks.) Question 2 The figures below represent expenditure on advertising and sales revenue of a manufacturer of fitness equipment, Run-Well limited between the period of 2016 to 2020. Year Advertising expenditure (X) Sales revenue (Y) (£000s) (£000S) 2016 2 60 2017 5 90 2018 4 70 2019 6 100 2020 3 80 Assuming you are a newly employed graduate business analyst, you are required to: a) Calculate the correlation coefficient of advertising/sales and comment on your results. (10 marks) b) Plot a scatter diagram of the data and discuss the pattern of the relationship of the variables. (8 marks) c) Critically analyse the impact of advertising expenditure on sales and advise the marketing manager on how the company can gain a competitive advantage in the fitness industry by adopting other relevant marketing strategies. (15 marks) Question 3 Raincoat Plc. produces and install ceiling materials. Below is the company’s estimated profit statement for the next accounting year, prepared using marginal costing principles. Per unit £ £ Selling price 440,000 Variable costs: Labour 140,000 Materials 102,000 Contribution 198,000 Less Fixed Costs: Administration 40,000 Other 50,000 90,000 Profit 108,000 Two suggestions have been made in an attempt to improve profit for next year: One by the operations manager and the other by the marketing Manager. 1.Operations manager’s suggestion The operations manager has suggested that cheaper materials could be used, which will reduce total material cost to £80,000. However, this will require additional fixed costs of £24,000 to cover the inspection of the cheaper materials. 2. Marketing manager’s suggestion The marketing manager has suggested an intensive advertising campaign. He estimates that this will increase sales volume by 20% over the estimated amount above. Variable cost as a percentage of sales revenue would not be affected by this option but extra fixed cost of £45,000 will be incurred to cover the advertising campaign. As a graduate business analyst in Raincoat, you are tasked to: a) Determine: i. The company’s breakeven point (3 marks) ii. The margin of safety as a percentage of estimated sales. (3 marks) for each of the original estimates, operations, and marketing manager’s suggestion. b) On purely financial grounds explain whether Raincoat Plc. should adopt the original plan or amend it in line with either the operations manager’s or marketing manager’s suggestion. (6 marks) c) What factors (not included in your analysis above should Raincoat Plc’s management consider before committing a company to the course of action. (6marks) (d) Critically analyse the benefits and limitations of the breakeven model, its application in marginal costing and as a business strategy for Raincoat Plc. (15 marks) Question 4 As part of an interview for a position as a Graduate Business Analysts for the Internal revenue service in UK, you are required to demonstrate your research and business analytical skills. As a result, you are tasked to: a (i) Research the monthly digest of statistics or the national statistical archives for any two economic variables which you think may be correlated (e.g., retail price index/employment, inflation/money supply, GDP/employment etc.) and (ii) Critically analyse and present your results in writing to the interview panel. Bear in mind the dangers of spurious correlation and seeking other factors, which may be influencing your data, including outliers. Interpretation may be simpler if you select cross sectional data taken at the same point in time (e.g., regional figures) rather than longitudinal data taken over a ten-year period. (33 marks) Categories Grade Relevance Knowledge Analysis Argument and Structure Critical Evaluation Presentation Reference to Literature 86 – 100% The work examined is exemplary and provides clear evidence of a complete grasp of the knowledge, understanding and skills appropriate to the Level of the qualification. There is also ample excellent evidence showing that all the learning outcomes and responsibilities appropriate to that Level are fully satisfied. At this level it is expected that the work will be exemplary in all the categories cited above. It will demonstrate a particularly compelling evaluation, originality, and elegance of argument, interpretation or discourse. 76- 85% The work examined is outstanding and demonstrates comprehensive knowledge, understanding and skills appropriate to the Level of the qualification. There is also excellent evidence showing that all the learning outcomes and responsibilities appropriate to that level are fully satisfied. At this level it is expected that the work will be outstanding in the majority of the categories cited above or by demonstrating particularly compelling evaluation and elegance of argument, interpretation or discourse. 70 – 75% The work examined is excellent and is evidence of comprehensive knowledge, understanding and skills appropriate to the Level of the qualification. There is also excellent evidence showing that all the learning outcomes and responsibilities appropriate to that level are satisfied At this level it is expected that the work will be excellent in the majority of the categories cited above or by demonstrating particularly compelling evaluation and elegance of argument, interpretation or discourse. 60 – 69% Directly relevant to the requirements of the assessment A substantial knowledge of strategy material, showing a clear grasp of themes, questions and issues therein A good strategic analysis, clear and orderly Generally coherent and logically structured, using an appropriate mode of argument and/or theoretical mode(s) May contain some distinctive or independent thinking; may begin to formulate an independent position in relation to strategic theory and/or practice. Well written, with standard spelling and grammar, in a readable style with acceptable format Critical appraisal of up-todate and/or appropriate literature. Recognition of different perspectives. Very good use of source material. Uses a range of sources 50 – 59% Some attempt to address the requirements of the assessment: may drift away from this in less focused passages Adequate knowledge of a fair range of relevant strategy material, with intermittent evidence of an Some analytical treatment, but may be prone to description, or to narrative, which lacks clear Some attempt to construct a coherent argument, but may suffer loss of focus and consistency, with issues at stake stated only vaguely, or Sound work which expresses a coherent position only in broad terms and in uncritical conformity to one or more standard views of strategy. Competently written, with only minor lapses from standard grammar, with acceptable format Uses