advantages of maths in business

7/30/2019 advantages of maths in business

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Mathematics in Business Decisions: -

Business mathematics is mathematics used by commercial

enterprises to record and manage business operations.

Commercial organizations use mathematics in accounting,

inventory management, marketing, sales forecasting and

financial analysis. Mathematics typically used in commerce

includes elementary arithmetic, elementary algebra, statistics

and probability. Business management can be made more

effective by the use of more advanced mathematics such as

calculus, matrix algebra and linear programming.

Another meaning of business mathematics, sometimes calledcommercial math or consumer math, is a group of practical

subjects used in commerce and everyday life.

Mathematics is an integral aspect of our daily life. Many

executive jobs such as those of business consultants, computer

consultants, airline pilots, company directors and a host of

others find that they require a solid understanding of basic

mathematics and in some cases require detailed knowledge ofmathematics. It also plays an important role in business, like

business mathematics by commercial enterprises to record and

manage business operations.

Mathematics typically used in commerce includes, elementary

arithmetic such as fractions, decimals and percentages,

elementary algebra, statistics and probability. Business

management can be made more effective in some cases by theuse of more advanced mathematics such as calculus, matrix

algebra and linear programming. Commercial organizations use

mathematics in accounting, inventory management, marketing,

sales forecasting and financial analysis.

The practical applications typically include checking accounts,

price discounts, markups and markdowns, payroll calculations,

simple and compound interest, consumer and business credit


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and mortgages. For example, while computational formulas are

covered in most study-material on interest and mortgages, the

use of prepared tables based on those formulas is also presented

and emphasized. Mathematics can provide a powerful support

for business decisions. Mathematics provides many important

tools for economics and other business fields.

1. The mathematical language by nature is concise and precise.

Hence, by using Mathematics we can restate the business theory

in a more compact form like the one Stated above in the case of

the demand law. In it the involved relationship is simple and

Self-explanatory in its mathematical form.

2. The mathematical simplicity enhances the precision of

analysis like the calculation of Equilibrium price, equilibrium

quantity, price elasticity of demand etc.

3. The mathematical approach can have always the advantage of

using the ever-growing unlimited amount of tools and theorems

in pure mathematics for their advantage. The Use of Eulers

mathematical theorem in business in explaining the distributionof income among the factors of production is the classical

example for such an advantage.

4. Once a certain specific mathematical relationship is obtained,

the business manager can deduce more useful new propositions.

5. The biggest advantage of mathematical science is its ability to

handle large number of variables at a given point of time. Forexample, in the theory of consumption especially in indifference

curve analysis, at the most we can handle only two

commodities, one along the x-axis and one along y-axis. But in

reality, our consumption basket contains a large number of

commodities. Mathematical science can handle this situation by

increasing the commodity space which can accommodate any

number of commodities in getting the extended equi-marginal

principle


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Role of statistics in Business decisions: -

Business statistics is the science of good decision making in the

face of uncertainty. It is used in many disciplines such as

financial analysis, econometrics, auditing, production and

operations including services improvement and marketing

research. These sources feature regular repetitive publication of

a series of data. This makes the topic of time series especially

important for business statistics. It is also a branch of applied

statistics working mostly on data collected as a by-product of

doing business or by government agencies. It provides

knowledge and skills to interpret and use statistical techniques

in a variety of business applications. A typical business statisticscourse is intended for business majors and covers statistical

study, descriptive statistics (collection, description, analysis and

summary of data), probability and the binomial and normal

distributions, test of hypotheses and confidence intervals, linear

regression and correlation

Inferential statistics tries to infer from the sample data what thepopulation might think. They can use inferential statistics to

make judgments of the probability that an observed difference

between groups is a dependable one or one that might have

happened by chance in a study.

Business Statistics is the science of good decision-making in the

face of uncertainty and is used in many disciplines such as

financial analysis, econometrics, auditing, production andoperations including services improvement, and marketing

research. These sources feature regular repetitive publication of

series of data. This makes the topic of time series especially

important for business statistics. It is also a branch of applied

statistics working mostly on data collected as a by-product of

doing business or by government agencies. It provides

knowledge and skills to interpret and use statistical techniques

in a variety of business applications. A typical business statistics


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course is intended for business majors, and covers statistical

study, descriptive statistics (collection, description, analysis, and

summary of data), probability, and the binomial and normal

distributions, test of hypotheses and confidence intervals, linear

regression, and correlation. Role of Statistics in Economic:

Economic statistics is a branch of applied statistics focusing on

the collection, processing, compilation and dissemination of

statistics concerning the economy of a region, a country or a

group of countries. Economic statistics is also referred as a

subtopic of official statistics, since most of the economic

statistics are produced by official organizations (e.g. statistical

institutes, supranational organizations, central banks, ministries,

etc.). Economic statistics provide the empirical data needed ineconomic research (econometrics) and they are the basis for

decision and economic policymaking. Econometric:

Econometrics is concerned with the tasks of developing and

applying quantitative or statistical methods to the study and

elucidation of economic principles. Econometrics combines

economic theory with statistics to analyze and test economic

relationships.

advantages of maths in business

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