Assignment on Importance of Business Mathematics in Management System

Importance Business Mathematics in management system is Mathematics typically used in commerce includes elementary arithmetic, elementary algebra, statistics and probability. Business Mathematics in management system can be made more effective in some cases by use of more advanced mathematics such as calculus, matrix algebra and linear programming. Business organizations use mathematics in accounting, inventory management, marketing, sales forecasting, financial analysis etc. It is mainly used in commercial enterprises for record and manages business operations.

What is Importance of Business Mathematics in Management ?

Mathematics is an important subject and knowledge of it enhances a person's reasoning, problem-solving skills, and in general, the ability to think. Hence it is important for understanding almost every subject whether science and technology, medicine, the economy, or business and finance. Mathematical tools such as the theory of chaos are used to mapping market trends and forecasting of the same. Statistics and probability which are branches of mathematics are used in everyday business and economics. Mathematics also form an important part of accounting, and many accountancy companies prefer graduates with joint degrees with mathematics rather than just an accountancy qualification. Financial Mathematics and Business Mathematics form two important branches of mathematics in today's world and these are direct application of mathematics to business and economics. Examples of applied maths such as probability theory and management science, such as queuing theory, time-series analysis, linear programming all are vital maths for business.

"Importance of Business Mathematics in Management" is sometimes called commercial math or consumer math, is a group of practical subjects used in commerce and everyday life. In schools, these subjects are often taught to students who are not planning a university education. In the United States, they are typically offered in high schools and in schools that grant associate's degrees.
Importance of Business Mathematics in Management is the differences in coursework from a business mathematics course and a regular mathematics course would be calculus. In a regular calculus course, students would study trigonometric functions. Business calculus would not study trigonometric functions because it would be time-consuming and useless to most business students, except perhaps economics majors. Economics majors who plan to continue economics in graduate school are strongly encouraged to take regular calculus instead of business calculus, as well as linear algebra and other advanced math courses, especially Real Analysis.

On the other way, meaning of business mathematics includes mathematics courses taken at an undergraduate level by business students. These courses are slightly less difficult and do not always go into the same depth as other mathematics courses for people majoring in mathematics or science fields. The two most common math courses taken in this form are Business Calculus and Business Statistics. Examples used for problems in these courses are usually real-life problems from the business world.

A U.S. business math course might include a review of elementary arithmetic, including fractions, decimals, and percentages. Elementary algebra is often included as well, in the context of solving practical business problems. The practical applications typically include checking accounts, price discounts, markups and markdowns, payroll calculations, simple and compound interest, consumer and business credit, and mortgages.

Description of Importance of Business Mathematics in Management

Business management can be made more effective in some cases by use 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. In academia, "Business Mathematics in Management system" includes mathematics courses taken a tan undergraduate level by business students. These courses are slightly less difficult and do not always go into the same depths other mathematics courses for people major in in mathematics or science fields. The two most common math courses taken in this form are Business Calculus and Business Statistics. Examples used for problems in these courses are usually real-life problems from the business world.
 
Mathematics is used in most aspects of daily life. Many of the top jobs such as business consultants, computer consultants, airline pilots, company directors and a host of others require a solid understanding of basic mathematics, and in some cases require a quite detailed knowledge of mathematics. It also play 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.

An example of the differences in course work from a business mathematics course and a regular mathematics course would be calculus. In a regular calculus course, students would study trigonometric functions. Business calculus would not study trigonometric functions because it would be time-consuming and useless to most business students, except perhaps economics majors. Economics majors who plan to continue economics in graduate school are strongly encouraged to take regular calculus instead of business calculus, as well as linear algebra and other advanced math courses. Other subjects typically covered in a business mathematics curriculum include Matrix algebra linear programming.

Business Mathematics

Business Mathmetics Includes :
 1. Principal - the initial amount of the debt, usually the price of the item purchased.
2. Interest Rate - the amount one will pay for the use of someone else's money. Usually expressed as a percentage so that this amount can be expressed for any period of time.


3. Time- essentially the amount of time that will be taken to pay down (eliminate) the debt. Usually expressed in years, but best understood as the number of and interval of payments, i.e., 36 monthly payments.


Simple interest calculation follows the formula:
I= PRT, where
I=Interest
P=Principal
R= Interest Rate
T= Time.

The challenge: Belal decides to buy a car. The dealer gives him a price and tells him he can pay on time as long as he makes 36 installments and agrees to pay six per cent interest. (6%). The facts are:

Agreed price 18,000 for the car, taxes included.
3 years or 36 equal payments to pay out the debt.
Interest rate of 6%.
The first payment will occur 30 days after receiving the loan
A simple timeline will give you an idea of the question we need to address.

Understanding the simple effect of interest on an amount in terms of a given time period and realizing that amortization is nothing more than a progressive summary of a series of simple monthly debt calculations should provide a person with a better understanding of loans and mortgages. The math is both simple and complex; calculating the periodic interest is simple but finding the exact periodic payment to amortize the debt is complex.

By totaling the amount of interest and calculating the average, you can arrive at a simple estimation of the payment required to amortize this debt. Averaging will differ from exact because you are paying less than the actual calculated amount of interest for the early payments, which would change the amount of the outstanding balance and therefore the amount of interest calculated for the next period.
 

Conclusion :

Business Mathematics in management system is able to make more effective in some cases by use of more advanced mathematics such as calculus, matrix algebra and linear programming. Business organizations use mathematics in accounting, inventory management, marketing, sales forecasting, financial analysis etc. Importance of Mathematics in Management System is a scheme of Business Management.

Reference :
1. http://mathematics.blurtit.com/q420028.html
2. http://math.about.com/library/weekly/aa101103a.htm
3. Brechner, Robert. (2006). Contemporary Mathematics for Business and Consumers, Thomson South-Western. ISBN 0-324-30455-2
4. Wegner, Trevor. (2010). Applied Business Statistics: Methods and Excel-Based Applications, Juta Academic. ISBN 0702172863
5. www.wikepedia.org.