Business mathematics

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Business mathematics are 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. [1]

Contents

Mathematics typically used in commerce includes elementary arithmetic, elementary algebra, statistics and probability. For some management problems, more advanced mathematics - calculus, matrix algebra, and linear programming - may be applied.

High school

Business mathematics, 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; elsewhere they may be included under business studies. These courses often fulfill the general math credit for high school students. [2]

The emphasis in these courses is on computational skills and their practical application, with practice being predominant. A (U.S.) business math course typically [2] includes a review of elementary arithmetic, including fractions, decimals, and percentages; elementary algebra is included also. The practical applications of these techniques include revenues, checking accounts, price discounts, markups, payroll calculations, simple and compound interest, consumer and business credit, and mortgages.

University level

Undergraduate

Business mathematics comprises mathematics credits taken at an undergraduate level by business students. The course [3] is often organized around the various business sub-disciplines, including the above applications, and usually includes a separate module on interest calculations; the mathematics itself comprises mainly algebraic techniques. [1] Many programs, as mentioned, extend to more sophisticated mathematics. Common credits are Business Calculus [4] and Business Statistics . [5] Programs may also cover matrix operations, as above. At many US universities, business students (instead) study "finite mathematics", [6] a course combining several applicable topics, including basic probability theory, an introduction to linear programming, some theory of matrices, and introductory game theory; the course sometimes includes a high level treatment of calculus.

Since these courses are focused on problems from the business world, the syllabus is then adjusted re standard courses in the mathematics or science fields. [7] The calculus course especially emphasizes differentiation, leading to optimization of costs and revenue. Integration is less emphasized, as its business applications are fewer — used here [8] in some interest calculations, and for (theoretically) aggregating costs and / or revenue — and it is more technically demanding. Relatedly, in a regular calculus course students study trigonometric functions, whereas courses here do not typically cover this area. As regards formal theory, as these are applied courses, very few proofs or derivations are included, unlike standard courses. [7] (Although see Bachelor of Science in Business Administration and Bachelor of Business Science.) The statistics syllabus, similarly of an applied nature, is described under that article.

Note that economics majors, especially those planning to pursue graduate study in the field, are encouraged to instead take regular calculus, as well as linear algebra and other advanced math courses, especially real analysis. Some economics programs (instead) include a module in "mathematics for economists", [9] providing a bridge between the above "Business Mathematics" courses and mathematical economics and econometrics. Programs in management accounting, operations management, risk management and credit management, may similarly include supplementary coursework in relevant quantitative techniques, generally regression, and often linear programming as above, as well as other optimization techniques and various probability topics. [10]

Postgraduate

At the postgraduate level, generalist management and finance programs include quantitative topics which are foundational for the study in question - often exempting students with an appropriate background. These are usually "interest mathematics" and statistics, both at the above level. MBA programs often also include basic operations research (linear programming, as above) with the emphasis on practice, and may combine the topics as "quantitative analysis"; MSF programs may similarly cover applied / financial econometrics.

More technical Master's in these areas, such as those in management science and in quantitative finance, will entail a deeper, more theoretical study of operations research and econometrics, and extend to further advanced topics such as mathematical optimization and stochastic calculus. [11] [12] These programs, then, do not include or entail "Business mathematics" per se.

Where mathematical economics is not a degree requirement, graduate economics programs often include "quantitative techniques", which covers (applied) linear algebra, multivariate calculus, and optimization, and may include dynamical systems and analysis; [9] regardless, econometrics is usually a separate course, and is dealt with in depth. Similarly, Master of Financial Economics (and MSc Finance) programs often include a (supplementary) course covering the calculus, optimization, linear algebra, and probability techniques required for specific topics.

See also

Related Research Articles

Management science is a wide and interdisciplinary study of solving complex problems and making strategic decisions as it pertains to institutions, corporations, governments and other types of organizational entities. It is closely related to management, economics, business, engineering, management consulting, and other fields. It uses various scientific research-based principles, strategies, and analytical methods including mathematical modeling, statistics and numerical algorithms and aims to improve an organization's ability to enact rational and accurate management decisions by arriving at optimal or near optimal solutions to complex decision problems.

<span class="mw-page-title-main">Mathematics education</span> Teaching, learning, and scholarly research in mathematics

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Lists of mathematics topics cover a variety of topics related to mathematics. Some of these lists link to hundreds of articles; some link only to a few. The template to the right includes links to alphabetical lists of all mathematical articles. This article brings together the same content organized in a manner better suited for browsing. Lists cover aspects of basic and advanced mathematics, methodology, mathematical statements, integrals, general concepts, mathematical objects, and reference tables. They also cover equations named after people, societies, mathematicians, journals, and meta-lists.

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The Master of Economics is a postgraduate master's degree in economics comprising training in economic theory, econometrics, and/or applied economics. The degree is also offered as an MS or MSc, MA or MCom in economics; variants are the Master in Economic Sciences (MEconSc), and the Master of Applied Economics.

Mathematics education in Australia

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<span class="mw-page-title-main">Master of Finance</span>

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<span class="mw-page-title-main">Center for Operations Research and Econometrics</span>

The Center for Operations Research and Econometrics (CORE) is an interdisciplinary research institute of the University of Louvain (UCLouvain) located in Louvain-la-Neuve, Belgium. Since 2010, it is part of the Louvain Institute of Data Analysis and Modeling in economics and statistics (LIDAM), along with the Institute for Economic and Social Research (IRES), Louvain Finance (LFIN) and the Institute of Statistics, Biostatistics and Actuarial Sciences (ISBA).

References

  1. 1 2 J. Olivier (2021). Business Math: A Step-by-Step Handbook. Lyryx Learning (open textbook)
  2. 1 2 Student Consumer Math Curriculum , consumermath.org
  3. ↑ See, for example, this DSST course outline: Business Mathematics Exam Information
  4. ↑ Two open texts are:
  5. ↑ Two open textbooks are:
  6. ↑ An open text is Rupinder Sekhon (2011). Applied Finite Mathematics.
  7. 1 2 What is the difference between business calculus and calculus?
  8. ↑ See, e.g.: The Integral § Applications to Business; Applications of the integral: Investment and depreciation; Applications of Integrals in Economics
  9. 1 2 Open texts include:
  10. ↑ See for example the "Qualification Subject" Quantitative Methods For Managers offered by the Institute of Commercial Management.
  11. ↑ See e.g: Robert Hildebrand, ed. (2024). Mathematical Programming and Operations Research (Open text)
  12. ↑ See e.g: Arash Fahim (2019). Introduction to Financial Mathematics: Concepts and Computational Methods (Open text)

Bibliography

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