Conference Proceeding

Mathematics in Space and Applied Sciences (ICMSAS-2023)
ICMSAS-2023

Subject Area: Mathematics
Pages: 331
Published On: 03-Mar-2023
Online Since: 04-Mar-2023

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Author(s): Yudhvir Singh

Email(s): yvsapc@gmail.com

Address: Dr. Yudhvir Singh
Associate Professor, Dept of Commerce, Government College, Nadaun, Dist-Hamirpur (H.P)
*Corresponding Author

Published In:   Conference Proceeding, Mathematics in Space and Applied Sciences (ICMSAS-2023)

Year of Publication:  March, 2023

Online since:  March 04, 2023

DOI:




Making Change with Mathematics: Conceptions of the Role of Mathematics in Business, Commerce, and Management Curriculum

 

Dr. Yudhvir Singh

Associate Professor, Dept of Commerce, Government College, Nadaun, Dist-Hamirpur (H.P)

*Corresponding Author E-mail: yvsapc@gmail.com

 

ABSRACT:

Today in this rapid changing technology driven world, job roles and nature have changed tremendously. It’s time for artificial intelligence and big data analysis. Job roles are redefined as analyst, consultant, research associate, data miner etc. which involve advanced mathematical applications. Business, commerce and management are few among the most popular disciplines among students. But these subjects lack mathematical applications in its introduction stages. And now in this changed scenario, reputed global institutions offer higher education opportunities for students who are having mathematical background. So the relevance of mathematics is increasing and it is soon become one of the mandatory subjects for students in all disciplines. Hence this paper examines the role of mathematics in business, commerce and management curriculum.

 

Keyword: Mathematics, Business, Commerce, Management, Curriculum

 

1. INRODUCTION:

Mathematics is a part of science that deals with the logic of shape, quantity and arrangements (Srinivasa  Ramanujan). Mathematics, what experts sought out different patterns, formulate new conjectures, and establish truth by rigorous deduction from approximately chosen axiom and definitions. In addition of these mathematics finds out logical solutions problems. Mathematics can be said as omnipresent since it is all around us. Its application in daily life is inseparable and incomparable. Whatever the field we are looking, whether it is sports or art or communication or engineering or technology, mathematics is the key element (Elaine J.Ho, 2013)

 

Business and management is also meaningless without mathematics. Business is concerned with buying and selling of goods and services with an aim to make profit. Here the value of good or service is expressed in money term, which as price, and the end result which is either profit or loss also expressed in numerical term. That clearly denotes how important mathematics in business is.

 

On the other hand, management is the art of getting things done through others and decision making. The task of every manager or higher official is to take managerial decision and mathematical aids them for logical solution for problem concerned. Decision making is not a single activity; it is a process which consist of series of inter related tasks. First step is clearly defining the problem, next step is analysing the alternatives in terms of most suitable model for solution of the problem. Thus mathematical applications like algorithm, calculus, algebra, linear programming, statistics, probability etc. are needed for the full-fledged functioning of business and management.

 

 

In case of curriculum, in India, Business and management is extensively taught in college and university level. Earlier, the syllabus includes Accounting as only numerical paper and other subjects like management, marketing, entrepreneurship, business studies, auditing etc. Then the role of mathematics and logical thinking came into picture and thus added subjects like business statistics operations research, and quantitative techniques. Nowadays, to get admission for graduation as well as post- graduation courses in business, commerce and management disciplines, reputed institutions made it compulsory to study mathematics as separate subject in qualifying examination. So that many commerce and management courses introduces new paper titled business mathematics in their curriculum.

 

Thus, the influence of mathematics in field of business, commerce and management is increasing day by day a study wants one to explore the role and applications of mathematics in this field.

2 . OBJECTIVE:

This paper intends to know the applications of mathematics in business, commerce and management as well as the role of mathematics in curriculum.

 

3.  METHODOLOGY:

The design is exploratory cum descriptive in nature which uses data from secondary sources and authors’ views are blended with it and presented accordingly.

 

4. APPLICATION OF MATHEMATICS IN BUSINESS, COMMERCE AND MANAGEMENT:

Mathematics plays significant role in our day today life. If we look into various job roles   also, the understanding of basic applied mathematics is some time essential. Jobs like Consultant, Analyst, Director, CEO, CFO, Economist, Research   Associate etc. requires mathematical and logical skills to perform the duty effectively. In the field of business, commerce and management also the mathematical influence is beyond our thoughts. Its application ranges from basic arithmetic such as fractions, ratios, algebra, probability etc. to advanced mathematical model building. Business entities and commercial organizations use arithmetic in the areas of accounting, inventory   management, budgeting, financial analysis and sales forecasting.

 

In the curriculum also, as mentioned earlier, new subjects like business mathematics gain popularity and acceptance since commerce and management higher education wanting basic mathematical understanding and knowledge. Advancement in Information and a Communication Technology (ICT) also accelerate the influence of mathematics, which allows easy learning opportunity for students.

 

4.1. FINANCIAL MANAGEMENT:

Financial management is one of the core areas in business and commerce. Financial management is concerned with procurement and effective utilization of funds. Financial management is more quantitative discipline in which various mathematical applications are there. Some of them are:

* Calculation of rate of return of Cost of Capital

* Deciding Capital Structure

* Asset   Valuation

* Portfolio Management

* Derivative Trading

* Risk Management

* Security Pricing etc.

 

4.2. ACCOUNTING:

Accounting is the language of business.  The result of business is communicated through accounting language to users or stakeholders of the business.  Accounting uses quantitative data and thus heavily depends on mathematical principles and techniques. Mathematical formulas are used for computation of   profit, loss, income, expenditure, depreciation etc.

 

Accounting discipline is further sub divided into financial accounting, cost accounting, corporate accounting and management accounting. In financial accounting, the net result of business is exhibited with the help of Profit and Loss account and Balance Sheet. The accounting is based on an equation which is mathematical one. The equation is A=L+C, “A” stands for Assets,  “L” stands  for Liabilities and “C” stands for Capital. By using mathematical relation, A=L+C, we can calculate total cost and decide whether to make or buy the product. The total cost formula for business is T=a + bx ,  where ”T” is TOTAL COST, “a” is fixed cost, “b” is cost per unit  and “x” is number of units produced. Profit is calculated by subtracting total cost from total revenue and helps in analyzing the financial health of business. Prices are determined by adding some profit margin to cost.

 

In cost accounting, calculation cost pertains to cost centres, ascertainment of Economic Order Quantity (EOQ), setting of stock levels etc. involve mathematical applications. In corporate accounting, accountings of companies are dealt with. It requires mathematical application in case of business combinations like amalgamation, absorption, external  reconstruction, calculation of purchase consideration, computation of value of goodwill, liquidation statement of affairs etc.  Management accounting mainly deals with managerial decision making. It involves financial statement analysis, fund flow statements, cash flow statements, budgetary control, ratio analysis etc. Ratio equations are derived from mathematical techniques and helpful in business comparison.

 

4.3. SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT:

One of the important areas in business and commerce is security market. It includes capital market and money market. Various short -term and long – term securities are traded in these markets. As we know, security market offers huge return at the same time it possess huge risk element too. So before investing money in financial or security markets, it is better to analyse the risk return trade off and select the best possible portfolio which gives maximum return with minimum risk. Portfolio here refers to group of securities. For analysis purpose, various mathematical models are used; they are Capital Asset Pricing Model (CAPM), Single Index Models, Fama -French Model, Treynor ratio, Jensen’s Index etc. With these mathematical models, we can make investment which in turn benefits the investors.

 

4.4. PRODUCTION PLANNING AND PRICING:

Production planning is one of the preliminaries of establishment of business. In this regard, it involves estimation of cost of materials, cost of production, machine life, depreciation, labour hour rate, wages and salaries, packing and storage cost, determination of different stock levels etc. which involves rigorous mathematical applications. After production, next step is regarding how much has to be charged as price. Because the survival and expansion of business is solely depends on the earning from sales. Profit is difference between cost price of the product and selling price. If you need high profit at initial stage, you should go for skimming price policy which is charging high price at initial stage. It is possible only when the business having less competition. If there is competition, it is better to go for penetration pricing which impose low price at beginning. Once the profit margin is decided, to calculate selling price, divide using percent or decimals.

 

For example, if you want to decide the retail price, if product cost is Rs.100 to produce and your required profit margin is 40 percent deduct .40 from 1, which gives .60 as remaining, denotes 60 percent. In order to determine the selling price of the product, divide 100 by .70, which rounds to Rs.142.86.

 

4.5. STATISTICS AND PROBABILITY:

After realizing the importance of statistics in business field, a separate subject known as business statistics is introduced in the commerce and management curriculum. Statistics assist business in forcasting demand and supply, market fluctuations, trend analysis, ratio analysis, financial statements, interpretation etc. There is need to predict the uncertainty and should provide for the future. There comes the need of probability applications. It is a sub area of statistics and essential for predication and estimation of risk return of business investments. It serves as a tool for decision making for the top level management.

 

4.6. LINEAR PROGRAMMING:

Linear programming is applied in many complex business problems to find out solutions. It is mainly used for marketing mix problems, distribution modeling, company   restructuring, routing and scheduling etc. In linear programming, the problems may be either in the nature of maximization of profits or minimization of costs. With help of mathematical models and logical steps, we will reach at a solution which is optimal (Lewis, 2008)

 

4.7. OPERATIONS RESEARCH:

Operation research is a military term used in US military operations. Later on this mathematical application gain popularity in business discipline. Hence it is also known by the names Management Science or Decision Sciences or Management Optimization Techniques. It is concerned with decision making under pressure or uncertain situations. The basis of decision will be regarding profit maximization, cost reduction, strategic management, performance   appreciation, or any other better management practices. Operation Research mainly involves application of mathematical models in real life situations and find out the optimal solution for problem concerned.

 

The techniques involved in operation research are as follows:

*Inventory Model-This technique deals with how much to order at a point in time, and when to place an order, the main objective of this model is minimize the total cost of inventory which includes the cost of holding, cost of storage, cost of ordering.

*Allocation Model- This technique used to allocate the resources to activities so as to optimize a measure of effectiveness or maximum utilization of resources. Waiting for a line or queuing line method. These models establish a trade- off between costs of providing service and waiting time of a customer in the queuing system.

*Game Theory-This model used to categorize the behavior of two or more competitors competing to achieve their conflicting goals. It explains the type of strategy which would yield the best or worst outcomes.

*Network Models- These models are applied to the management of large scale projects. Here PERT/CPM techniques help in identifying delay and project critical path. It leads to efficient use of resources.

* Sequencing Model- These models are used to determine the sequence or order in which a number of tasks can be performed by a number of service facilities. In such a way that some measure the performance is optimized.

 

4.8. CALCULUS:

Calculus is the study of the rate of changes, e.g. velocities, interest rate, return on asset. It is invented by Sir Issac Newton and Gottfriend Wilhelm V0on Leibniz. The key areas of calculus are viz. differential calculus and integral calculus. These are two unrelated areas which are connected with fundamental theorem of calculus. Differential calculus play key role in decision making in production management, e.g. supply of raw material, wage rates and taxes etc.

 

In calculus, the case when “y” is a function of “x” or in other words, one variable(y) is dependent  on other variable(x) and derivative of “y’ with respect to “x” i.e. dy/dx measures  the change of variable “y” with respect to change in variable “x”. Derivative enables a firm to make important production decisions. It is also called the marginal function. Demand can be assumed as a function of price. This operator is also helpful in calculating minimum cost and maximum profit. Also, the total cost of production and marketing depends on number of units in mathematical  relations, which can be described as c(x) is cost function v(x) is variable cost and F is fixed cost. Revenue function R(x) is represented as R(x)= xp(x), where “x” is number of units and “p” is the rate per unit. Hence knowledge of derivative is essential for understanding the economic relations. Another integral operator is used to calculate the total revenue in case of marginal revenue is given. It also aid in calculation of profit and taxes to be paid which are important for any business.

 

5. CONCLUSION:

The role played by mathematics in the field of business, commerce and management is remarkable. If we try to extract and set aside mathematical element from these fields, the area becomes meaningless. Linear programming and operation research made complex business problems into simple solutions; calculus and algebra applications of mathematics are essential in profit, revenue and tax computation. Program Evaluation and Review Techniques (PERT) and Critical Path Method (CPM) helps in project scheduling and cost crashing; without mathematical principles and formulas, accounting will be waste of time, product pricing will decide the future of business which depends on mathematical analysis and forecasting. Thus in a nutshell, the field of business, commerce and management, from the beginning to end is heavily relying upon mathematical applications. Mathematics is one of the major ingredient in building management and business education which is required for self- reliant and self-actualization which the country is clamoring for. By including mathematics in curriculum, the students get more opportunities for their higher education and most importantly, their logical, critical thinking capacity and problem solving analytical skills will be improved.

 

6. REFERENCES:

1.  Lewis, C (2008), Linear Programming: Theory and Applications.

2. www.assignmentpoint.com/business/business -mathematics/application-of-mathematics i-in-   business.html





6. REFERENCES:

1.  Lewis, C (2008), Linear Programming: Theory and Applications.

2. www.assignmentpoint.com/business/business -mathematics/application-of-mathematics i-in-   business.html



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Author/Editor Information

Dr. Sanjay Kango

Department of Mathematics, Neta Ji Subhash Chander Bose Memorial, Government Post Graduate College, Hamirpur Himachal Pradesh-177 005, INDIA