What Is the Role of Mathematics in Business Management?
Mathematics plays a major role in business management because it helps maximize profit by using techniques such as analyzing production costs, determining ideal pricing, discerning sales patterns and projecting future sales. Having strong skills in mathematics means an individual can analyze all of a company’s finances and make changes to save the company money and time, and ultimately make a higher profit.
The study of mathematics is essentially just studying number patterns, and in business, this means knowing how to manipulate numbers and make meaning out of large data sets. All companies need some sort of mathematician to look at the company’s expenses, sales and cash flow. If a company has good documentation of where their money is coming from and going to, using mathematics, an individual is able to see inefficiencies in the company’s operations and make important changes.
For instance, assume that a company is selling a lot of a product that has a very low sale price. After someone buys the product, half of the money that the company just made is just covering the production costs of the product, and another quarter of the money goes to the labor and shipping costs for the product. This means that only one-fourth of the sales price goes to profit. A mathematician could look at all of the costs and use simple arithmetic to find out how much the product’s sale price could be raised to make more money left for overhead, while still maintaining high enough sales numbers to ultimately increase profit.