K501: Business Mathematics and Probabilities

Application of Business Mathematics in the field of

Management & Economics

Submitted by—

M. Samiul Islam
Roll: 05
Class: MBA 44D
Section: A

Submitted to –

Mr. Asad-uz-Zaman
Lecturer, IBA-DU.

Submission date: 04.02.2010

.
Institute of Business Administration, Dhaka University
The study of Business Mathematics enables an individual to develop basic math skills and its
relevance to everyday applications of business and management. These skills encompass the
ability to solve mathematical problems, analyze and interpret data, and apply sound decision-
making skills in helping business professionals to fulfill their future roles as successful managers
and entrepreneurs.

A foundation of basic mathematical procedures can be built by using number relationships and
operations as well as identifying patterns, functions and algebraic equations for different
business scenario. In addition professionals would be able to analyze data to solve
business/consumer-related problems. It would also demonstrate a developmental approach to the
acquisition of computations skills.

Generally, business mathematics covers a wide variety of mathematical tools and concepts useful
for taking proper business decision. It includes elements of algebra, number fields, linear and
non-linear inequalities, function sets, analytical geometry, logarithm limit, differential and
integral calculus, matrix and linear programming.

 Linear programming and matrix plays an important role in optimizing production

program. Linear algebra is also used in economics and econometrics.
 Differential and integral calculus allows investigating specific properties of function in
cost, revenue, profit, demand, production or utility like the maximization of profit,
minimization of cost and the determination of an optimal management strategy for
inventory.
 A system of linear equation or linear inequalities can be used to model diversified
economic and business program.
 The logarithmic and exponential functions describes the phenomena of growth like the
growth of population, contamination, epidemics, money etc.
 Probability theories can be used to solve stochastic problems that commonly occur in
decision making situations.

Furthermore, the application of business mathematics can also be applied in inventory control,
quality control, warehouse location, oil industry operations, agriculture, purchasing decisions,
scheduling of complex tasks such as building a shopping center, and a variety of other areas. It

2|Page
was also coupled with innovative application of the rapidly evolving electronic computer and
was directed toward business management problems. Thus, it leads to the derivation of many
management decisions and solutions.

In recent times, a firm understanding of mathematics is essential for any business student.
Several mathematical tools are frequently needed by the business and economic student. It is
indeed necessary to know a lot of results of higher mathematics to understand the current
economic literature and to use modern economic tools in practical economics and business.

List of References:

1. Prichett, G. D., & Saber, J. C. (1994). Mathematics with application in management and
Economics. Boston: IRWIN.

2. Werner, F., & Sotskov, Y. N. (2006). Mathematics of Economics and Business. New York:
Routledge.

3|Page