Functions and Sets: Applications - Essay Example

There are various applications of functions in the business domain and some of them are discussed below:1. Quantity demanded is a function of price, if the price increases then quantity demanded to goes down.2. The wages of the workers are dependent on the number of hours worked. Sales person's salary is dependent on the number of units of product that he sells.3. Total cost for a project is dependent on the number of fixed costs and the variable costs.4. Economic Order Quantity (EOQ) formula is also represented as a function.

EOQ is the number of units in an order that minimizes the total costs. EOQ is a function of setup costs and the cost of holding inventories.5. The concepts of present values and future values used in finance are also represented as function.6. The depreciation and machine value are also somehow related and can be represented as functions.7. Make or Buy decisions are the most important decisions made by the managers. Managers define the models as functions and then decide for whether to produce the materials themselves or outsource them.8. The profit is a function of cost and revenue.

Where q = quantity sold9. Forecasting of various variables can be represented using functions. For instance, if we want to predict the next year's profit then we will first find out the linear equation from the past data using regression tools and then we can simply put the value of the year for which we want to predict the profits. Sets are a fundamental concept of mathematics. A set is a well-defined collection of objects. For instance, a set of people who have defaulted on loans amounting to $500,000.

The set theory involves operations related to sets (union, intersection, complement, etc.). These sets are also vital for business applications. For example, let’s say that A = set of customers buying more than two shampoos at a time. B = set of customers buying a conditioner. The set theory has limited usage in the business world but set theory concepts provide a useful vehicle for presenting and discussing probability concepts. These probability mechanisms are applied thoroughly in the business world. Fuzzy set theory is also an emerging concept that is being applied nowadays for business applications.