Module 2: Business Decision Making

Software generated information for decision making in business

Management information systems

Computer information programs are very important in business. There are several different types of computer systems that can help manage various business processes.

For example,

Stock management systems
Human resource management systems
Financial and accounting systems
Student information systems

... and many more, including specialist systems for specific businesses.

Project management

Business projects can be complex, involving multiple people, teams and resources. A business needs to make sure everyone knows what needs to be done and when, as well as making sure the right resources are in the right place so people can do their jobs. Systems such as network analysis and Gantt charts can be used to organize the project.

Click on the titles below to learn more:

Network and critical path analysis

Network and critical path analysis is a way of illustrating the processes and activities that should take place in order to complete a project. Critical path analysis is a way to add task durations to the network diagram to calculate how long tasks will take and analyse which tasks are critical for a project to be completed on time.

You can read more here:

Critical Path Analysis

Gantt Charts

Gantt charts also aim to ensure that projects are completed on time. This time, the tasks are laid out in the form of bars on a calendar.

Read the blog to learn more about Gantt's charts:

What a Gantt Chart is

Financial tools

Businesses need to make financial decisions.

Various methods can also be used to help make financial decisions, for example:

Net present value
Discounted cash flow
Internal rate of return

Net present value

Present value refers to the current value, today, of an amount of money that is received in the future. It is a way of measuring the current value of future cashflows.

This is important because the amount of money received in the future is worth less than the same amount of money received today. This is because of interest rates and inflation rates.

You can calculate a present value using the formula below:

Where is

PV – Present value
FV – Future value
r – Interest Rate
t - Time

You can also use discount tables.

Since money you receive in the future is worth less than money you receive today, net present value is used to evaluate whether a project that pays over time is worth it.

This is done through methods known as discounted cash flow and internal rate of return.

You can learn more here:

Investment Appraisal