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Application of Differential Calculus
Application of Differential Calculus
Local, Global
Stationary Point
Application of Differential Calculus
2. Test a point just to the left xl, and a point just to the
right xr of each stationary point.
f ʹ (x) = x2 + 2x – 8
Let, f ʹ(x) = 0
⇒ x2 + 2x – 8 = 0
⇒ (x + 4) (x – 2) = 0
⇒ x = - 4, 2
2. Find f ʹʹ(x)
Ex. 15
Let the cost function of a firm be given by the
following equation: C = 300x – 10x2 + ⅓x3,
where x stands for output. Calculate:
Ex.29
The total cost function of a firm is C(x) = ⅓ x3 – 5x2 +
28x + 10 where C is total cost and x is output. A tax at
the rate of Tk.2 per unit of output is imposed and the
producer adds it to his cost. If the market demand
function is given by p = 2530 – 5x, where Tk. p is the
price per unit of output. Find the profit maximizing
output and price.
Application of Differential Calculus
Ex 53 (page 711)
The material demanded is 10,000 units per year;
the cost price of material is Tk.1 per unit, the cost
of replenishing the stock of material per order
regardless of the size Q of the order is Tk.25; and
the cost of storing the material is 12.5% per year
on the taka value of average quantity on hand.
Find the total cost function, economic order
quantity and the total cost corresponding to that.
Deriving EOQ
Application of Differential Calculus
Annual Cost
Ordering Costs
Inventory Cost
Application of Differential Calculus
Q + DS + PD
TC = H
2 Q
Annual Annual
Total cost = carrying + ordering
cost cost
Q + D S
TC = H
2 Q
EOQ Model
Application of Differential Calculus
Application of Differential Calculus
A local distributor for a national tire company expects to
sell approximately 9,600 steel-belted radial tires of a
certain size and tread design next year. Annual carrying
cost is $16 per tire, and ordering cost is $75. The
distributor operates 288 days a year. Determine:
a. what is the EOQ?
b. how many times per year does the store reorder?
c. what is the length of an order cycle?
d. what is the total annual cost if the EOQ quantity is
ordered?
Deriving EOQ
Application of Differential Calculus
Deriving EOQ
Application of Differential Calculus
PD = 10,000 x 1 = 10,000
OC = 10,000/Q x 25
HC = Q/2 x 12.5%
Deriving EOQ