Course Title: Business Mathematics and Statistics

MBA-1003 Date: June 5, 2010

Lecture in charge: Sir. khalid Mehr

“Business Mathematics and Statistics

Project”

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 Submitted on:
June, 06

“SEMINAR
REPORT” 201
0
A SEMINAR, conducted by the students of MBA-1A, offered
at MOHAMMAD ALI JINNAH UNIVERSITY ISLAMABAD
by

DEPARTMENT OF BUSINESS ADMINISTRATION

A report submitted in Fulfillment of the Requirements for the Degree of

Masters of Business Administration
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Group Members

• Ahtasham Malik

• Maria Khadim

• Sohail Ayub

• Saba Tariq

• Talah Yousaf

BONAFIDE CERTIFICATE

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It is certified that I have read the project report submitted by all the students of this group. It is my
judgment that this report is of sufficient standard to warrant its acceptance by, the business
administration department of Muhammad Ali Jinnah University, Islamabad for the degree of Masters
in business administration.

SUPERVISORY COMMITTEE

Chairman/Dean (M.A.J.U)

Sir.Khalid Mehr

Muhammad Ali Jinnah University, Islamabad

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 Dedicated To

To our parents who cherished us in our childhood and always pray for
our better future.

Acknowledgment

First, we owe gratitude to Almighty Allah, the most merciful and compassionate, most
gracious and beneficial whose factor made it possible for us to accomplish this task assigned to us.

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And we also offer our thanks from the depth of our soul to the last messenger Hazrat Muhammad
(P.B.U.H), who is forever a torch of guidance and knowledge for entire humanity.

We pay heartiest tribute to our supervisor Sir. Khalid Mehr for their valuable suggestions,
positive criticism, and guidance throughout our project work.

Words cannot say the gratitude that we feel for our parents for their moral boost
encouragement & financial support. Particularly, we have always been feeling my parent’s right
behind us praying, patronizing and enabling our to work out the era of living both spiritually and
physically & whose prayers was incessant enabling us to acquire this stage.

And we are also thankful to our friends and cousins whose affection and prayers have always
been the key to our success. Without all of them support, prayers and Allah’s help, it was almost
impossible for us to complete this project.

ABSTRACT

Mathematics & statistics 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

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subject whether science and technology, medicine, the economy, or business and
finance. Mathematical tools such as the theory of chaos are used to mapping market
trends and forecasting of the same.
Statistics and probability which are branches of mathematics are used in everyday
business and economics. Mathematics also forms 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 from two important branches of mathematics in today's
world and these are direct application of mathematics to business and economics.
Mathematics is about pattern and structure; it is about logical analysis, deduction,
calculation within these patterns and structures. When patterns are found, often in
widely different areas of science and technology, the mathematics of these patterns
can be used to explain and control natural happenings and situations. Mathematics
has a pervasive influence on our everyday lives, and contributes to the wealth of the
country.

TABLE OF CONTENT

CHAPTER TITLE PAGE NO

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 1 CHAPTER 1

1.1 Outline of report 8

9
1.2 Objective of the Seminar
9
1.3 Introduction of Guest speaker of seminar

Chapter #2

2.2 History of mathematics & statistics 12

2.1 Importance of 14
 Business Mathematics
 Business Statistics

Chapter #3

Conclusion 16

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Objective of the seminar

 Students learned about the:

o History of business mathematics & statistics.

o Importance of mathematics & statistics in business management.

o How it is co-related with finance, HRM etc.

o How business mathematics and statics helped in decision making?

Introduction of Guest speaker

 NAME: Sir. Farooq Ahmed Jam

 OCCUPATION : Lecturer at ISLAMIC UNVERSITY,ISLAMABAD
 EDUCATION: PHD last semester

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Chapter #2
History of mathematics and statistics
Mathematics has been part of American higher education since the founding of
Harvard College in 1636. In the seventeenth century, however, the level of
instruction was low—arithmetic and the rudiments of Euclidean geometry—reflecting
the primitive state of elementary education and the underlying aim of preparing
young men for the ministry.

By 1800, new colleges had been founded that focused more on liberal education.
The mathematics curriculum grew accordingly to include algebra, trigonometry, and
sometimes even Newton's fluxional calculus. Colonial professors of mathematics
drew, however, from Great Britain, a country that had fallen behind the Continent—
especially France—in pedagogical innovations and original research.

This situation began to change by the 1820s. Beginning in 1817, the U.S. Military
Academy at West Point followed the example of France's state‐of‐the‐art école
Polytechnique and incorporated into its curriculum not only Leibnizian calculus but
also the descriptive geometry that had been developed by Gaspard Monge. At
midcentury at Harvard, Benjamin Peirce (1809–1880) crafted a curriculum in the
mathematical sciences for the new Lawrence Scientific School (1847) that included
some of the latest foreign research. Nevertheless, prior to 1876, America's colleges
were almost exclusively undergraduate institutions. Research was not part of the
faculty's mission, although some, like Peirce with his abstract theory of algebras
(1870), pursued research anyway.

Colleges were not the sole locus of mathematical activity in nineteenth ‐century
America. In a few instances, mathematicians worked individually: Robert Adrain
discovered the law of least squares in 1809 independently of Carl Friedrich Gauss,
while Nathaniel Bowditch translated and wrote penetrating mathematical
commentary on Pierre Simon de Laplace's challenging Mécanique céleste(1828–
1839). The federal government supported mathematical activity in its U.S. Coast
Survey and Nautical Almanac Office, where George William Hill did ground ‐breaking
work on the three‐body problem (1877).

After 1870, new research‐oriented universities were founded and many colleges
began to emphasize research. The first mathematics program to offer research ‐level

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training opened in 1876 at Johns Hopkins University under a British algebraist,
James Joseph Sylvester. Following Sylvester's departure in 1883, mathematically
inclined Americans turned to Germany, particularly the University of Göttingen and
Felix Klein. There they absorbed the latest mathematics and the notion that
academic mathematics encompassed both teaching and research. Returning to
American institutions newly receptive to this ideal, they set up graduate programs
and pursued their research agendas. By 1900, a professional community of
mathematical researchers supported programs, notably at the University
of Chicago under Eliakim Hastings Moore and at Harvard under William Fogg
Osgood and Maxime Bôcher, and sustained at least four research journals as well as
the American Mathematical Society (1888).

While American mathematicians embraced all of pure mathematics, certain areas of

strength emerged. At Chicago, Leonard Eugene Dickson and his student A. Adrian
Albert established a center for algebra. Princeton, with Oswald Veblen, Luther
Pfahler Eisenhart, James Alexander, and Solomon Lefschetz, excelled in geometry
and topology. Robert L. Moore created a school of point set topology at the
University of Texas at Austin. Harvard built on its strength in analysis with George
David Birkhoff, Joseph Walsh, and Marshall Stone.

Newer mathematical areas strengthened in the 1920s and 1930s owing both to the
influx of European refugees and to the establishment of new research venues.
Statistics as a tool for social analysis had grown during theProgressive Era with its
practitioners conveying their findings through the American Statistical Association
(1839). Activists such as Harry Carver at the University of Michigan, however,
worked to establish statistics as a more mathematical field. Their efforts, including
the formation of the Institute for Mathematical Statistics in 1935, received a
considerable boost after the rise of Nazism brought refugees such as Jerzy Neyman
to Berkeley and Mark Kac to Cornell. Others also fled to American shores, among
them Hermann Weyl to Princeton's Institute for Advanced Study; Richard von Mises
to Harvard; and Emil Artin, Richard Brauer, and Emmy Noether. Applied
mathematics likewise profited from the European influx, as well as from the formation
of industrial‐research facilities like Bell Telephone Laboratories (1925). During  World
War II, the Applied Mathematics Panel within the federal Office of Research and
Development coordinated mathematical work on war ‐related questions.

Thanks partly to wartime successes, the postwar period witnessed a dramatic

increase in federal support of mathematics, as the National Science Foundationled
an institutionalization of academic grants that contributed to an explosive growth of
American mathematical research. Late twentieth ‐century American mathematicians
solved such noted problems as the Bieberbach conjecture, the classification of finite
simple groups, the four‐color problem, and Fermat's Last Theorem. The immigration
of mathematicians from China, the former Soviet bloc, and elsewhere also
contributed to the country's mathematical strength as the century ended

Importance of business mathematics

Business mathematics entails the interpretation and assessing of tables, graphs and
charts, calculation of markups and discounts and solving problems related to
percentage, proportion and ratio ; ascertaining costs of unit , scaled costs for

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receipts, full costs; budgets; financing; costs evaluated against cash; credit;
comprehending income, payroll taxes and deductions; investigation federal income
tax annual reports; comparing different financial investment systems; knowing sales
including taxes, utility, property and other additional taxes; assessments of insurance
programs; knowledge of costs of manufacturing, and evaluation of the performance
of a business.

Mathematics at the Core

Mathematics shows many faces as it works in these diverse settings. Statistics

measures the quality of information. Optimization finds the best alternative.
Probability quantifies and manages uncertainty. Control automates decision making.
Modeling and computation build the mathematical abstraction of reality upon which
these and many other powerful mathematical tools operate. Mathematics is indeed
the foundation of modern decision making.

Mathematics and Decision Making

The role of mathematics in Business decisions has very important in the process of
managerial decision models and algorithms. To turn to the specific aspects of
quantitative decision making process, it is possible to recognize three distinct phases
in every decision situation. First is carefully defined the problem, second is a
conceptual model to be generated and third is the selection of the appropriate
quantitative model they may lead to a solution. Lastly a specific algorithm is selected.
Algorithms are the orderly delineated sequences of mathematical operations that
lead to a solution. The algorithms generate the decision which is subsequently
implemented managerial action program. The entire process is shown below:
 Defined problem
 Conceptual model
 Quantitative Model
 Algorithms
 decision
 Action programs

Decisions shape our lives. Mathematics rationalizes the sifting of information and the
balancing of alternatives inherent in any decision. Mathematical models underlie
computer programs that support decision making, while bringing order and
understanding to the overwhelming flow of data computers produce. Mathematics
serves to evaluate and improve the quality of information in the face of uncertainty,
to present and clarify options, to model available alternatives and their
consequences, and even to control the smaller decisions necessary to reach a larger
goal.

Mathematical areas like statistics, optimization, probability, queuing theory, control,

game theory, modeling and operations research --- a field devoted entirely to the

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application of mathematics in decision making --- are essential for making difficult
choices in public policy, health, business, manufacturing, finance, law and many
other human endeavors. Mathematics is at the heart of a multitude of decisions,
including those that generate electric power economically, make a profit in financial
markets, approve effective new drugs, weigh legal evidence, fly aircraft safely,
manage complex construction projects, and choose new business strategies.

Mathematics & economics

Interestingly, mathematics makes itself a symbiotic subject to finance, business, and

economics and even for military accreditations. Economics with mathematics is the
answer for many economists who will make assumptions on the theory they would
like to present on the workings of the economy but ill realize their ambitions be met
when they use numbers to explain their relative thoughts. 

Businesses understand their motions in the market with the help of maths under
conditions what they need to achieve to be the masters or what they need to remain
in the business at all. Developing understanding that we are all connected to the
mathematics will help us look beyond the horizons of the stars.
Math is important and relevant in economic analysis, these are just two components
of economic analysis and not the only way to view an economic model, as most
economic analysis can be done with graphs.

Finance & Mathematics

Finance may be defined as the study of how people allocate scarce resources over
time. Financial Mathematics is a collection of mathematical techniques that find
applications in finance, e.g.

– Asset pricing: derivative securities.

– Hedging and risk management
– Portfolio optimization
– Structured products

Mathematics & HRM

Human resource is the function performed in organization that facilities the most
effective use (employees) to achieve organizational goals.
 It is action oriented
 It is people oriented
 & it is future oriented.
The actions, language and performance of the HRM functions, is measured by
mathematics and evaluated then precisely created. Mathematics helps HRM in
analyzing and solving problems from a profit-oriented point of view, also on
interpreting and assessing costs or benefits of such HRM issues as productivity,

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 salaries and benefits, recruitment, training, absenteeism. Lastly also helps HRM
for preparing reports to solution to problems encountered by the firm

Importance of Statistics
Statistics plays a vital role in every fields of human activity. Statistics has important
role in determining the existing position of per capita income, unemployment,
population growth rate, housing, schooling medical facilities etc…in a country. Now
statistics holds a central position in almost every field like Industry, Commerce,
Trade, Physics, Chemistry, Economics, Mathematics, Biology, Botany, Psychology,
Astronomy etc…, so application of statistics is very wide. Now we discuss some
important fields in which statistics is commonly applied.  

(1) Business:
 

Statistics play an important role in business. A successful businessman must be very

quick and accurate in decision making. He knows that what his customers wants, he
should therefore, know what to produce and sell and in what quantities. Statistics
helps businessman to plan production according to the taste of the costumers, the
quality of the products can also be checked more efficiently by using statistical
methods. So all the activities of the businessman based on statistical information. He
can make correct decision about the location of business, marketing of the products,
financial resources etc…

(2) In Economics:

          Statistics play an important role in economics. Economics largely depends

upon statistics. National income accounts are multipurpose indicators for the
economists and administrators. Statistical methods are used for preparation of these
accounts. In economics research statistical methods are used for collecting and
analysis the data and testing hypothesis. The relationship between supply and
demands is studies by statistical methods, the imports and exports, the inflation rate,
the per capita income are the problems which require good knowledge of statistics.

(3) In Mathematics:

          Statistical plays a central role in almost all natural and social sciences. The
methods of natural sciences are most reliable but conclusions draw from them are
only probable, because they are based on incomplete evidence. Statistical helps in
describing these measurements more precisely. Statistics is branch of applied
mathematics. The large number of statistical methods like probability averages,
dispersions, estimation etc… is used in mathematics and different techniques of pure
mathematics like integration, differentiation and algebra are used in statistics.

 (4) In Banking:

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          Statistics play an important role in banking. The banks make use of statistics
for a number of purposes. The banks work on the principle that all the people who
deposit their money with the banks do not withdraw it at the same time. The bank
earns profits out of these deposits by lending to others on interest. The bankers use
statistical approaches based on probability to estimate the numbers of depositors
and their claims for a certain day. 

(5) In State Management (Administration):

          Statistics is essential for a country. Different policies of the government are

based on statistics. Statistical data are now widely used in taking all administrative
decisions. Suppose if the government wants to revise the pay scales of employees in
view of an increase in the living cost, statistical methods will be used to determine
the rise in the cost of living. Preparation of federal and provincial government
budgets mainly depends upon statistics because it helps in estimating the expected
expenditures and revenue from different sources. So statistics are the eyes of
administration of the state.    

(6) In Accounting and Auditing:

          Accounting is impossible without exactness. But for decision making purpose,

so much precision is not essential the decision may be taken on the basis of
approximation, know as statistics. The correction of the values of current asserts is
made on the basis of the purchasing power of money or the current value of it.
            In auditing sampling techniques are commonly used. An auditor determines
the sample size of the book to be audited on the basis of error.

Chapter #3

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 Conclusion

 Business Mathematics is a tool for the subjects like economics, finance.

 It enables students to interact with numbers. 
 Business is all about making money.  If one is well versed in basic
mathematics there's no need for him to be having a personal auditor for
keeping accounts of his income and outcome. 
 Auditors must be avoided as they can cheat you very easily if you are a duffer
in maths. 
 As far as Statistics provides the theory and methodology for the analysis of
wide varieties of data.

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