Mathematics plays an important role in managing the business. Mathematics and business go hand in hand because it is all about to manage money and to make a decision. To handle this, the knowledge of mathematics is essential. All the business operations need business mathematics, which is used by commercial enterprises. It uses maths profit and loss concepts for accounting purposes and some other concepts are used in the fields like sales, marketing, forecasting, analysis etc. Business mathematics also incorporates statistics to provide solutions for business problems.
With the help of mathematical models, the problems that happen on a daily basis can be solved effectively. Some companies hire mathematicians to work as a financial analyst, budget analyst, security analyst, market research analyst. Some of the applications of mathematics in business are as follows:
Production Cost Estimation
Before you establish the business, first you have to estimate the cost of production that is required for the business like administrative expenses, machinery, rent, cost of raw materials etc. In addition to this, the calculation of the essential expenses like marketing, loans, interest rates, warehousing has been included. To sustain in the competitive business market, the estimation of the budget is important.
Pricing the product is more important once you successfully determined the cost of the product. The selling price will ensure the correct amount of cash flows for later demands.
Profit estimation is the determination of the net profit by subtracting the running cost from the total amount of sales over a period of time. This helps to continue the business operations and expands the business level.
Analysing the sales figures and pricing of the products is done by sensitivity analysis. To analyse the financial health of the business, it is necessary to forecast the expense and income of a business. Business mathematics helps in making the interpretation and take the business to tremendous levels.
Apart from the application of mathematics in business, applied mathematics is widely used in various fields of engineering like computer science, architecture, etc. In the construction field, finding the quadrilateral angles, trigonometric angles, length, height etc., mathematical concepts are needed.
To discover related kind of information, subscribe to BYJU’S YouTube channel and also download BYJU’S – The Learning App to learn with ease.