0% found this document useful (0 votes)
27 views19 pages

linear-equations-applied-in-business

The document discusses the application of linear equations in business, emphasizing their importance in solving real-life business problems and facilitating decision-making. It outlines the history, definitions, and significance of linear equations, as well as key business terms like fixed costs, variable costs, and utility. The report aims to demonstrate how mastering linear equations can enhance business operations and financial outcomes.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
0% found this document useful (0 votes)
27 views19 pages

linear-equations-applied-in-business

The document discusses the application of linear equations in business, emphasizing their importance in solving real-life business problems and facilitating decision-making. It outlines the history, definitions, and significance of linear equations, as well as key business terms like fixed costs, variable costs, and utility. The report aims to demonstrate how mastering linear equations can enhance business operations and financial outcomes.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 19

LINEAR EQUATIONS APPLIED IN

BUSINESS
Mathematics for Business (César Vallejo University)

Studocu is not sponsored or endorsed by any college or university.


Downloaded by grace ulcuango ([email protected])
CESAR VALLEJO UNIVERSITY

FACULTY OF BUSINESS SCIENCES

PROFESSIONAL SCHOOL OF ADMINISTRATION

Linear Equations Applied in Business

AUTHOR(S):

Azaña Alvarado, Rafael Ronaldinho (https://orcid.org/0000-0002-6920-5907)

Delgado Rosales, Lizeth Flor (https://orcid.org/0000-0003-1555-9344)

Oyola Leyva, Medalit Jasmine (https://orcid.org/ 0000-0002-6628-6289)

Rodriguez Garcia, Nicole Stefhany (https://orcid.org/0000-0001-5918-4068)

ADVISOR(S):

Mautino Minaya, Madelaine Nicolasa (https://orcid.org/0000-0002-1906-0666)

LINE OF RESEARCH:

Organization Management

HUARAZ – PERU

2021

This document is available free of charge on S studocu


Downloaded by grace ulcuango ([email protected])
INDEX
LINEAR EQUATIONS APPLIED IN BUSINESS.........................................................................1
Mathematics for Business (César Vallejo University)............................................................1
FACULTY OF BUSINESS SCIENCES.......................................................................................2
Linear Equations Applied in Business....................................................................................2
AUTHOR(S):......................................................................................................................2
ADVISOR(S):.....................................................................................................................2
LINE OF RESEARCH:.......................................................................................................2
INDEX........................................................................................................................................3
YO. INTRODUCTION..............................................................................................................1
S studu............................................................................................................................................3
11.1. History of linear equations...................................................................................4
ax + b = c.............................................................................................................................4
11.2. Definition of linear equation.................................................................................5
11.3. Definition of business terms.................................................................................6
CT = CF + CV.....................................................................................................................6
IT – CT = UTILITY............................................................................................................7
PE = CF / (Price – CV).......................................................................................................7
11.4. Importance of linear equations in business...........................................................7
Phase 1: Data approach.......................................................................................................9
Phase 2: Problem Solving...................................................................................................9
OBJECTIVE FUNCTION: 15x + 25y..............................................................................10
Interpretation of the tables:...............................................................................................10
Phase 4: Feasible region....................................................................................................10
Phase 5: Finding the unknown point (f)............................................................................11
Phase 6: Replace the points in the objective function.......................................................12
I.

ANNEXES

Downloaded by grace ulcuango ([email protected])


YO. INTRODUCTION

Nowadays, applying linear equations in business is very common, as this has


become another technique to facilitate work in companies; and although many
wonder how does it work? It is actually very simple, it is all a matter of mastering the
concepts well and practicing constantly to avoid mistakes that harm the company.
Now, to get more up to date, it should be mentioned that linear equations use known
quantities to find the unknown ones. On the other hand, business is characterized by
the exchange of money or another monetary unit and this is measured as quantity.
In addition, money is often exchanged for other quantities, such as hours of work,
volts of electricity or quantities of raw materials; and these in turn form part of the
company's general expenses.
So, since we know what each term consists of, establishing a relationship between
them is very simple, because applying equations is usually very unavoidable in
everyday business situations. Furthermore, posing a linear equation is not very
complicated and does not require much science. Therefore, we can say that to
establish a relationship between economic variables, linear functions can be adopted
since they are simpler to formulate.

Likewise, Zambrano (2011), who through the study he carried out on the "Statement
and solution of equation problems, using strategies and methods proposed in the
historical development of the theory of equations", states that linear and quadratic
equations are used to model phenomena in science, being also a fundamental
subject in mathematics and its management is a basic competence to develop,
which has become a double obstacle for a large number of students, businessmen
or natural persons. Solving these types of equations is reduced to applying
algorithms mechanically, which are often not understood and becomes an exercise
in memory. On the other hand, the handling of mathematical topics is observed in
isolation and without connection with

This document is available free of charge on S studocu


Downloaded by grace ulcuango ([email protected])
Other concepts or applications within the curriculum, such as Pascal's triangle, the
division of polynomials, the Pythagorean theorem, etc., which can serve as tools for
understanding and solving linear and quadratic equations.

Similarly, Lucas (2015), mentions through his report entitled “First-degree linear and
fractional equations” that his objective is to learn to differentiate and solve linear and
fractional equations, as well as improve mastery of mathematical operations. The
first degree equation or linear equation means that it is a statement of equality,
involving one or more variables to the first power, which does not contain products
between the variables, that is, an equation that involves only additions and
subtractions of a variable to the first power. In every commutative ring first degree
equations can be defined. We know that a linear or first-degree equation is one that
only involves addition and subtraction of variables raised to the first power (raised to
one, which is not written). They are called linear because they can be represented
as straight lines in the Cartesian system. This report tells us that the equation is a
mathematical equality between two algebraic expressions, called members, in which
known values appear, data, and unknown or unknown values, related by
mathematical operations.

Therefore, this report has as general objective to demonstrate the effectiveness of


using linear equations in real-life problems that occur in business; and as specific
objectives we must relate the history of linear equations, determine the concept of
linear equations, determine the basic concepts in business, identify the importance
of linear equations in business and operate an example of application of linear
equations in business.

On the other hand, as a result of confinement, businesses have had to face various
problems, most of which were also solved by the application of linear equations.
2

Downloaded by grace ulcuango ([email protected])


As various authors mention, the application of mathematical topics in everyday
situations is essential; therefore, the business field cannot be an exception.
This report seeks to demonstrate the effectiveness that can be achieved in the
company if linear equations are applied correctly.

This document is available free of charge on S studu

Downloaded by grace ulcuango ([email protected])


11. DEVELOPMENT

11.1. History of linear equations

During the period from 1700 BC and 1700 AD, the creation of
symbols and resolution of equations was achieved. Likewise, in this
phase algebra was developed by the Greeks, exactly 300 years BC;
at that time it was called geometric algebra, which involved various
geometric methods to solve algebraic equations.
Symbolic notation characterizes the beginning of a new phase, in
which Descartes, during the years 1596-1650, contributes to
developing said notation; and it is in this period that algebra becomes
a science of symbolic calculations and equations.
The equations have gone through a process of more than 3000 years,
so that they are currently expressed in the following way:
ax + b = c
The Egyptians wrote and solved hundreds of mathematical problems
on their papyri. Most of these problems were arithmetic and were
related to everyday situations; however, some were found that are
considered algebraic, since they did not set any specific objective, as
their solution was based on performing operations with the data in an
analogous way, just as we solve equations now.

During the 3rd century AD The first mathematical documents were


written by the Sulvasütras, who were in charge of collecting
information or data for the construction of temples. And in these notes
is where the mathematical problems appear, one of them is: "Find the
side of a rectangle, knowing the other side and knowing that its area
is equal to the area of a given square."

Later, in the 7th century, Brahmagupta proposed how to solve linear


equations. He mentioned that the unknown was represented by “ya”,
and operations were represented with the first syllable of words.
(Lopez, I. and Ruiz, C. (sf))

Downloaded by grace ulcuango ([email protected])


11.2. Definition of linear equation

Linear equations are used to determine unknown quantities or figures


from real or known data or quantities.
On the other hand, Diez, Gómez, and Breña (2001) say that, “an
equation refers to an equality, in which one or more unknowns
participate and it can only be verified that it is true for certain values of
the unknowns.”
Furthermore, an equation is called linear as long as its variables are
raised to the exponent 1, and none of the terms of the equation must
be formed from the intersection of two or more variables.
De Moreno and De Castellanos (1997) indicate that a first degree
equation with one unknown (linear equation) is an expression that in
symbolic language is presented in the form Ax + B = C where x is the
expression of one unknown and A, B and C are variables. The terms
Ax and B are related through the operation addition. Likewise, to solve
linear equations, one must have the ability to establish a relationship
between the unknown, the numerical quantities, and the concept of
equality; in addition, one must take into account that for these cases,
not only the basic concepts must be taken into account, but also the
reasoning that arises from developing them.
These equations are of general use, since they can be applied in
various situations; for example, when applied to economics, they
allow the calculation of the supply and demand of products, and this is
how most people participate in business-related activities. (Zambrano,
2011)

11.3. Definition of business terms


In business, various terms are used, and it is essential to know their
definitions, so that we can avoid confusion when trying to find or
explain them through our executions of methodologies for
mathematical calculations. These terms are as follows:
- Fixed cost: Represents the sum of all costs independent of the
level of production. For example, rent, insurance, etc. This cost is
paid regardless of whether it has been generated or not.

Downloaded by grace ulcuango ([email protected])


Furthermore, this cost does not vary despite any changes that may
occur in production.

- Variable cost: It is the sum of all costs dependent on the level of


production. For example, wages and materials.
The variable cost varies according to the volume of production,
that is, if the activity grows, the costs will also grow, but if
production decreases, the costs will decrease.

- Total cost: The total cost is obtained from the sum of the fixed
costs (FC) and the variable cost (VC).
CT = CF + CV

- Total income: It is the amount of money that the manufacturer


manages to collect from the sale of its products. Within this
calculation, the unit price of the product must be taken into
account.

IT = Unit price (# of units sold)

Income does not include the costs or expenses incurred to obtain


this income. Income can be classified into:
Total income: income obtained from the sale of all products.
Marginal revenue: corresponds to the income generated by
increasing production by one unit.
Average income: corresponds to the average income per unit
sold, that is, it is the total income divided by the total number of
units sold.

Utility: Utility is the company's profit itself, not the income; that is,
utility is the gross profit obtained from selling the product. To
calculate this, you must subtract total income from total cost.

Now, utility can also be understood as the profit obtained by selling


a product. Therefore, it does not consider expenses in the
calculation and corresponds to a contribution margin per product.

Downloaded by grace ulcuango ([email protected])


IT – CT = UTILITY

Break-even point: The break-even point refers to the minimum


quantity of products that the company must sell in order for the
profit to be zero (0). That is, total costs equal total sales revenue.

PE = CF / (Price – CV)

The price of a product: Deciding the price of a product is not


easy, since this price must cover costs and expenses, generate
profits and, above all, be affordable for its customers. (Monographs
Plus, (sf))

This document is available free of charge on “m) SU-OK


11.4. Importance of linear equations in business

Applying linear equations is of utmost importance for business, since


within a company different calculations are required, within which
there is data that is known and data that needs to be found, and this
can be found using first degree or linear equations. First degree
equations can be used to solve different problems that arise at any
moment in our daily lives.
Mainly, business equations allow calculating supply and demand, this
will allow the company to grow and develop in a better way, for this it
must have personnel who can carry out this activity with great
precision and effectiveness; because if a person incapable of being
able to do the calculations is hired, the production and financial
income of the company would decline, therefore, the company could
go bankrupt.
So we can say that using linear equations for business purposes will
allow a business to have better results, with less investment of time,
and these finances will be reflected in the result of sales production.

In addition, linear equations are of great importance since they allow


us to represent numerous problems in different areas of engineering
and other sciences using one of them, so that we can calculate a

Downloaded by grace ulcuango ([email protected])


relevant value of the problem that we do not know using data that we
do know. (Rodriguez, 2021)

11.5. Example of linear equations applied in business

Downloaded by grace ulcuango ([email protected])


NATURAL COFFE is a coffee shop that sells espresso and American
coffee to its customers. In recent months, its profits have decreased
due to the poor implementation of linear functions by those in charge
of the area.
Therefore, to solve this company problem, we will apply a series of
steps or phases:

Phase 1: Data approach

To pose the problem, data must be obtained, and this can be found
through the following steps:
- Ask producers how many beans they use to make each package
of coffee.
- Ask the manager how many grains they have.
- Ask the manager how much his profit is per product sold.

From the data collected, it was established that the package of


American coffee requires 4 ounces of ground beans and 12 ounces of
holy beans per package. The espresso package contains 10 ounces
of riados beans and 6 ounces of santos per package. The business
has 80 lb of dried grains and 90 lb of santos. The Natural Coffee
company earns 15 soles for American coffee and 25 for espresso
coffee.

Phase 2: Problem Solving


Coffee data statistics
From the
data
obtained, the
following can
be
concluded:

This document is available free of charge on S studocu


Downloaded by grace ulcuango ([email protected])
- “x” > Qty. From American coffee packets
- “and” > Cant. From espresso coffee packets

Now we set out the objective function, since the profit for each type of
coffee package is known:

OBJECTIVE FUNCTION: 15x + 25y

And we can also establish the restrictions, in the form of inequalities:

Phase 3: Restrictions

4x + 10y = 80 12x + 6y = 90
and and
x x
20 0 7.5 0
0 8 0 15
Interpretation of the tables:

- Table 1: From the table we obtain that, if “y” equals 0, “x” would be 20; and
if “x” equals 0, “y” would be 8. Obtaining the ordered pairs (0;20) and
(0;8).
Table 2: From the table we obtain that, if “y” equals 0, “x” would be 7.5;
and if “x” equals 0, “y” would be 15. Obtaining the ordered pairs (0;7.5)
and (0;15).

Phase 4: Feasible region

To establish the feasible region, the ordered pairs found previously must be
located on the graph.

1
0

Downloaded by grace ulcuango ([email protected])


In the graph, A, B, C and D constitute the feasible region. From these points
we obtain the following:

A> (0; 8) Where X = 0 and Y = 8

C> (0; 0) Where X = 0 and Y = 0

E- (7.5; 0) Where X = 7.5 and Y = 0

F^? Where X = ? and Y = ?

Point F has no values, therefore it has to be found.

Phase 5: Finding the unknown point (f)


Point F is the intersection of the two lines, therefore, we must find their
values, and we will do so through the reduction method between the two
inequalities.

1
1
This document is available free of charge on S studocu
Downloaded by grace ulcuango ([email protected])
By applying the reduction method, we find the values y = 25/4 and x = 35/8;
which are the coordinates of point F.
F- (35/8; 25/4)

Phase 6: Replace the points in the objective function


We replace the found coordinates in the objective function.

VERTEX OBJECTIVE FUNCTION: 15x + 25y


A (0;8) 15(0) + 25(8) = 200
C (0; 0) 15(0) + 25(0) = 0
E (7.5; 0) 15(7.5) + 25(0) = 112.5
F (35/8; 25/4) 15 (35/8) + 25(25/4) = 221.875

RESULT: After performing the corresponding calculations, we found that at


point “F” the maximum profits were reached,

1
2

Downloaded by grace ulcuango ([email protected])


then you would have to sell 35/8 packages of American coffee and 25/4
packages of espresso coffee, which would be 4.37 packages of American
coffee and 6.25 of espresso coffee, but when talking about packages they
must be expressed in whole numbers, therefore, you should sell 4 packages
of American coffee and 6 of espresso. (Camacho, 2016)

III. CONCLUSIONS

1
3
This document is available free of charge on S studocu
Downloaded by grace ulcuango ([email protected])
• Through this project we learned a very important topic, which is the linear
system. We learned different methods when developing this essay.
Currently, we can solve different problems in everyday life in different
ways, depending on the methods we learned. We consider it important
because our career is based on this, by using graphical methods we
calculate the quantity and price according to graphs, and this will lead us
to take better results. Similarly, when we do not know how much to
produce or what should be produced less, the system of equations will
help us solve it. Thus avoiding unnecessary expenses.

• We can conclude that linear equations are very important for business,
since they allow the different areas of a business to make calculations,
such as costs, expenses, profits, etc.

• To apply linear equations in business, you must have a thorough


understanding of the subject, because if you do not master the subject,
instead of generating improvements for the company, you will harm them;
because in mathematics, if you only miss a sign or number, the results
are wrong, and that would be detrimental to a company.

• We can conclude that linear equations are of great importance since


through them we can represent numerous problems in different areas
such as engineering, administration and other sciences in such a way
that we can calculate relevant values of the problems that we do not
know through data that we do know.

• To solve problems involving linear equations, different skills are needed,


such as: handling the concept of variable, making certain generalizations;
establishing qualitative relationships between data and unknowns of the
problem; using symbols appropriately; establishing the equation and
solving it; then interpreting the solutions obtained; possessing all of the
above will allow the result for the business to be favorable, and above all
will serve as support instead of generating greater problems.

• Linear equations play an important role in decision making, since by


applying them we can also calculate projections, and this will help
companies to have a vision of what production will be like in future
periods.

1
4

Downloaded by grace ulcuango ([email protected])


IV. BIBLIOGRAPHIC REFERENCES

Application of Equations in Administration | Monographs Plus. (s. F.).

Monographs Plus. Retrieved December 5, 2021, from

https://www.monografias.com/docs/Aplicacion-De-Ecuaciones-En-

Administracion-P3CDKLJYMYhttps://www.monografias.com/docs/Aplicacion-

De-Ecuaciones-En-Administracion-P3CDKLJYMY

Camacho, D. (2016, November 22). Linear functions and their application in

a company's business. Prezi. Retrieved December 5, 2021, from

https://prezi.com/rr9bxpw2rhor/linear-functions-and-their-application-

in-the-business-of-an-em/

Faille, C. (February 1, 2018). How are linear equations used in business?


Geniusland. https://www.geniolandia.com/13171563/how-linear-
equations-are-used-in-businesshttps://www.geniolandia.com/
13171563/como-son-usadas-las-ecuaciones-lineales-en-los-negocios

Luke, I. (2015, October). Linear equations (No. 1). Good tasks.


https://www.buenastareas.com/ensayos/Informe-Ecuaciones-
Lineales/81448258.html

Lopez, I. and Ruiz, C. (s. F.). History of equations and systems. CAP of

Madrid-Center. Retrieved December 3, 2021, from

http://enebro.pntic.mec.es/

%7Ejhep0004/Pages/CarmenIn/history.htm

Zambrano Garcia, L. AND. (2011). Statement and solution of equation


problems, using strategies and methods proposed in the historical
development of the theory of equations. Bogotá: National University of
1
5
This document is available free of charge on S studocu
Downloaded by grace ulcuango ([email protected])
Colombia.
http://repositorio.usanpedro.pe/bitstream/handle/USANPEDRO
/13380/Tesis_62624.pdf?sequence=1&isAllowed=y

1
6

Downloaded by grace ulcuango ([email protected])

You might also like