ASSIGNMENT ON: BUSINESS MATHEMATICS IN APPLICATION AND

IMPLICATION TO AGRIBUSINESS MANAGEMENT

AGRIBUSINESS:

Agribusiness is defined as the sum total of all operations involved in the

manufacture and distribution of farm supplies, production operations on
the farm and the storage, processing and distribution of the resulting farm
commodities and items.

MANAGEMENT:

Management can be defined as a set of activities including planning and

decision making, organizing, leading and controlling directed at an
organization’s resource ( human, Financial , physical and information)
with the aim of achieving organizational goals in an efficient an effective
manner.

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. Statistics and probability which are branches of mathematics are
used in everyday business and economics. Mathematics also has 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 has two important branches of mathematics in today's
world and these are direct application of mathematics to business and
economics.

Business mathematics is mathematics used by commercial enterprises

to record and manage business operations. Commercial organizations use
mathematics in accounting, inventory management , marketing, sales
forecasting and financial analysis. Agribusiness Business management can
be made more effective in some cases by use of more advanced
mathematics such as calculus, matrix algebra and linear programming.
Examples used for problems in Business Mathematics are usually real-life
problems from the business world.

Business mathematics teaches us the mathematical concepts and principles

of multivariate calculus, and matrix algebra, differential equations and
their applications in business. Business mathematics involves concept
understanding, problem formulation and solution, graphing etc.

Therefore students will be able to apply their mathematical skills to

various business problems for the optimal solutions.

Our business mathematics courses was started with the calculus:

functions, annuity, limits, derivatives and anti derivatives (integrals) with
their properties and applications (demand, elasticity; total costs, total
revenue, total consumption, total savings and their marginal propensities;
interest rates, investment and capital formation etc).

Topics on multivariate calculus consist of functions of several variables,

successive differentiation ,partial differentiation , partial and higher order
derivatives, relative and absolute maxima and minima , double and
multiple integrals with their properties and applications (competitive and
complementary demand relations; Cobb-Douglas production function;
integral average value calculations for different business problems; areas
between curves and volumes between surfaces; linear programming
problems on profit maximization and cost minimization with sensitivity
analysis and shadow prices; transportations problems, etc.).

Topics on matrix consist of operations with matrix and their properties,

Cramer’s rule, Transpose of a matrix, elementary row transformations
including method of finding inverse , Ad joint of a matrix and method of
finding inverse etc.

Topics on differential equations will consist of first order ordinary

differential equations, separable differential equations, homogeneous
ordinary differential equations, first order linear differential equations,
equations with reducible order, linear homogeneous and non-
homogeneous equations of the second order with constant coefficients,
linear systems with constant coefficients with their applications
( applications of Cobb-Douglas production function; linear trade model,
etc.). Additional applications include expense minimization principle;
profit maximization and demand on resources; determination of the
volume of production which maximizes the profit (non-linear case);
analysis of companies controlled by labor in short run and in long run;
measure of monopolistic power, etc.
APPLICATION AND IMPLICATION OF BUSINESS MATHEMATICS

Business mathematics gives the students expanded knowledge of

mathematic applications for personal use and business applications.
Personal use application includes financing costs and loan procedures,
as well as major consumer expenses and earnings—
auto/housing/insurance/wages/benefits/banking/investing.

business applications includes the cost of recruiting, hiring, training,

maintaining employees; manufacturing/production costs;
purchasing/selling/marketing costs;
transportation/warehousing/inventory costs; and financial management
and planning.

Various application of business mathematics in production

1. Cost of manufacturing a product

2. Break-even analysis

3. Quality control

4. Time study

5. Fundamental processes

a. Compute break-even point in number of manufactured units

b. Compute percent of defective goods

c. Use time and study results to compute number of units that can be
produced and percent of time on task

d. Compute dimensions of packaging containers

Application in purchasing and selling

1. Discounts—trade, chain, cash

2. Selling prices
3. Net profit

4. Fundamental processes

a. Compute net price

b. Compute trade discount rate

c. Compute cash price

d. Compute selling price

Application in Marketing and services

1. Projected sales

2. Advertising costs

3. Pricing products

4. Cost of buildings, maintenance, equipment, and utilities

5. Consultants’ fees

6. Fundamental processes

a. Compute rate of response to survey

b. Compute annual sales potential of a product and market share

c. Compute cost of advertising—newspaper and television

d. Compute selling price that will result in h

e. Compute rental and utility costs

Application in Warehousing and distribution

1. Storage space

2. Inventory

3. Transportation

4. Fundamental processes

a. Compute total storage space

 b. Compute inventory value and cost of carrying inventory

c. Compute shipping cost by truck

Application in Business accounting

1. Apportioning expenses

2. Depreciation

3. Complete financial statements

4. Vertical/horizontal analysis of financial statements

5. Fundamental processes

a. Compute the percent of business expense to total expense

b. Compute a department’s share of total business expense

c. Use depreciation methods

d. Compute total assets, liabilities, and owner’s equity

e. Compute cost of goods sold

f. Compute ratios and percentage of change

Application in financial management and planning

1. Corporate income taxes

2. Raising capital—issuing stocks and bonds and commercial loans

3. Growth expenses

4. Inflation

5. Gross Domestic Product/Consumer Price Index Problem-Solving

Conclusion:

As Agribusiness management involves providing agricultural

supplies and processing, marketing , transporting and distributing of
agricultural materials and consumer products. Therefore Business
mathematics plays an important role in agribusiness management.