Real Life Application of Maths in Business and Management

Maths is an important part of Business and Management for good decision-making and efficient operations. Business is the activity of producing and selling goods or services for profit and Management is the process of organizing the business resources to complete specific goals.

Business Mathematics

In this article, you will learn the various applications of maths in Business and Management.

What is Business Mathematics?

Business is the process of producing and selling goods or services for profit. For example, a person selling fast food in his food stall in the market is a business to makes and sells food for profit.

Business math is all about understanding how a company makes money and manages its expenses. It involves figuring out things like how much to charge for a product to make a profit, calculating discounts, and keeping track of finances. Businesses use math to handle their day-to-day operations, like budgeting, pricing products, and tracking sales, to help them run smoothly and profitably.

Management is the process of coordinating the resources of the business such as people, finance, equipment etc. to achieve specific goals for the business. For example, the management team for a fast food restaurant checks for food quality, manages the staff, checks the finances, recruits staff etc. Both Business and Management are interlinked as with management the business can’t achieve the financial goals that it wants.

For example, if the fast food restaurant need to grow the business with more food items and staff then the management team of the restaurant need to research and add new food items, recruit more staff and check for improving profits.

Application of Mathematics in Business

Mathematics has a huge impact on Business and Management including things such as pricing products, profit analysis etc. Some of the applications of maths in Business and Management are:

In Financial Calculations

For the business and management there are many calculations related to pricing and the profits which is done using basic arithmetic and algebra. These are some basic maths concepts used everyday for the business.

For example, a furniture seller calculates the cost of materials and labor to produce a chair then add a 20% discount thus displaying the final selling price that gives them the required profit.

In Modeling

Most successful business checks all the business related data from customers to products to decide any changes or plan for future opportunities. Maths concepts is used by learning models for market analysis and find opportunities in the market depending upon the customer demands and sales number.

For example, an online clothing ecommerce platform analyzes the sales data over the past years and finds there is increase in demand for foot wears. This helps them to stock up on specific foot wears to meet customer demands with a greater profit.

In Statistics

Maths is used to create charts and graphs to summarize and check for historical data in an organized format. This charts and graphs can be used for the meeting to discuss the growth or possible changes in the business model.

For example, Various expenses of to produce a mango drink can be displayed in a pie chart to check for possible improvements in the expenses by reducing unwanted expenses or replacing existing ones with good cheaper options.

In Marketing

Maths is also used to create a successful marketing strategy to improve future sales. Most Businesses uses different pricing models to attract customers with different budgets. Mathematical analysis is used to create a price that balances profits along with customer demand.

For example, a clothing store advertise an offer during the winter seasons that if you buy items sweater more than 500 you get a discount of 20%.

In Risk Management

Many maths tools are used to check for financial risks and future changes in a business. Some software also takes input and determines the possible risk in the business. The tools also helps stimulate future scenarios which helps prevent any risks in actual implementation of any change in the business model.

For example, a ecommerce store uses various tools to monitor users demand and stock to prevent running out of stock of specific items thus making profits without any issues.

FAQs on Application of Mathematics in Business

What are applications of math in business?

Mathematics is used by business to record and manage business works and for accounting, inventory management, marketing, sales forecasting and financial analysis.

What are basic maths concepts needed in business?

Basic maths concepts needed in business are arithmetic, percentage, ratios, discounts etc.

How is maths used in management?

Maths is management used from basic budgeting and cost analysis to complex scheduling and risk assessment.

How maths is used for modelling in business?

Complex formulas are used simulations of things like sales or finances. These models help businesses make future decisions.