ASSIGNMENT
Of
Business Mathematics and Statistics
Topic: Business Application of Mathematics
and statistics
Submitted To:
Mohammad Amin
Submitted By:
Hamid Irfan Najmi
MBA Evening
Roll# MBA-10-48
1st Semester
Institute of Management Sciences
BZU,
Multan.
Mathematics
"The abstract science which investigates deductively the conclusions implicit in
the elementary conceptions of spatial and numerical relations, and which includes
as its main divisions geometry, arithmetic, and algebra."
It is the study of quantity, structure, space, and change. Mathematicians seek out
patterns, formulate new conjectures, and establish truth by rigorous deduction
from appropriately chosen axioms and definitions.
Statistics
“The branch of mathematics that deals with the collection, organization, analysis,
and interpretation of numerical data. Statistics is especially useful in drawing
general conclusions about a set of data from a sample of the data.”
It is the science of the collection, organization, and interpretation of data. It deals
with all aspects of this, including the planning of data collection in terms of the
design of surveys and experiments.
Difference between Mathematics and Statistics
Mathematics
A science (or group of related sciences) dealing with the logic of quantity and
shape and arrangement.
Statistics
A branch of applied mathematics concerned with the collection and
interpretation of quantitative data and the use of various theories to estimate and
interpret.
In Mathematics, context obscures structure and in Statistics, context
provides meaning.
Mathematical theorems are true, while Statistical methods are sometimes
effective when used with skills.
Statistics has cultural strengths that might greatly assist mathematics, while
Mathematics has organizational strengths that can provide shelter for
academic statistics, shelter that may be essential for its survival.
Mathematics is a proven formula, statistics are based on survey
Mathematics is a subject based on numbers; statistics is a branch of
mathematics based on variables, graphs, etc.
Mathematics deals with numbers in general, their properties, relations
between quantities and so on. Statistics on the other hand, deals purely
with numeric data, processing it and deriving conclusions from it.
Mathematics is a pure science while Statistics is an applied science.
Mathematics is based on formulized facts but Statistics is based upon
analysis, estimation, and survey.
We use core information in Mathematics, on the other hand we use
sampling in Statistic.
Role of Statistics in Business
Stats is used everywhere in a real firm. Statistics is the backbone for market
research in marketing, and demographic analysis breakdowns are used in
economic analysis of a given area or subject.
Accounting and finance uses Statistics for financial planning. As the world is
uncertain, that must be reflected in future forecasting. We do that with stats.
Business managers use stats for process control, total quality management, and
many other uses.
Statistics are mainly used in business to gather information about their customers
(current or potential), and would mainly be used to help improve or increase sales
or marketing by making their business more tailored to their customers.
Alternatively, if they were looking to open new markets, then they would use this
to research the needs and demands of customers. Statistics are also used in
business to work out the breakdown of financial dealings of the company, so they
can address where the spending and returns have been for the company, so they
can budget for future spending and expenses.
Statistics plays an important role in business, because it provides the quantitative
basis for arriving at decisions in all matters connected with operations of business.
As like statistics helps in a business to plan production according to the tastes of
the consumers.
Statistics in business can also serve as a tool of management to evaluate
performance of machines and personnel. It also enables the businessman to
judge the efficiency of new production methods by studying relationship between
costs and methods of production
It also Helps To:
1. Study demand 2. Accounting and auditing
3. Quality control 4. Location size decisions
5. Planning future operations 6. Marketing decisions
7. Production planning 8. Business Decisions
Role of Mathematics in Business
Mathematics 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 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. Mathematics
can provide powerful support for business decisions. In their later business
careers, this will motivate them to consult with mathematicians and employ
effective quantitative methods.
Mathematics provides many important tools for economics and other
business fields.
Also businesses rely heavily on using percentages, in particular anyone who
works as a sales person will need to be quick at mental arithmetic,
approximation and in working out percentages. The more percentage
discount you give a customer when you sell them a product, the less profit
your company will make (and quite often the less you will be paid!) so it really
does pay to know your math.
If you work as a sales assistant in many stores you now need to have the
ability to calculate the cost of goods and change the customers require
without using the till.
Other subjects typically covered in business mathematics
Curriculum include:
Matrix algebra
linear programming
Probability theory
Examples of Mathematics in Business
1. Accounting:
In daily business life we greatly use Mathematics in accounting procedures.
Calculus has a vast application in accounting.
2. Taxation:
Another use of Mathematics in business is in the field of Taxation. Different
mathematical techniques are applied to file a return of tax.
3. Interest Rates:
Mathematics is also involved in determining the interest on Loans, modgage and
other financial instruments
4. Time Value of Money:
We can find the value of money, Future value, present and past values of money
by applying Simple interest, compound interest and annuity concepts.
5. Use of Percentages:
It is important to apply Percentages concept because it will help us to find the
true values, and the missings figures in financial statements.
6. Trends of Markets:
By the efficient use of Linear equations and equation functions we can find out
trends of markets i.e whether market trend is rising or falling.
Examples of Statistics in Business
1. Financial Analysis:
Statistical techniques help us to make true analysis of our financial statements.
We can compare statements and hence sort out position of business.
2. Probabilities:
An important aspect of statistics is Probability. Business is unpredictable so art of
probability tells us occurrence of major events in business.
3. Marketing:
By conducting research, survey, and collecting customer feedback by using
statistical forecasting techniques now it is easy to now that which market is best
for our products.
4. Averages:
With the use of averages now it is convenient to set prices of products, allocation
and handling of different costing elements.
5. Forecasting in business:
It is truly helpful to forecast different business situations such as pricing trends,
establishment of new markets, customer satisfaction, product establishment etc.
