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Chapter Two
Business Case

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University Photocopier is a partnership business organization in the university
area. This shop is selected to present the applications of Mathematical Tools in
business by Group One. Their total capital is 500000 taka. This shop provides the
service of photocopying and printing documents to the students. This shop is
conducted by three partners and they share the profit at ratio(3:4:3).

University Photocopier has three photocopier machines and two printer. In

photocopier, there are two analog machines which cost 90000 taka each and one
digital machine which cost 120000 taka. Moreover, in printer, there is a Laser
printer which cost 15000 taka and a photo printer which cost 8000 taka. A
computer is also available there to serve the customer and its acquiring cost was
40000 taka. Taken together, the whole cost for equipment was 363000 taka.

The shop mainly provides the service of photocopy and printing. The major
revenue source is the photocopying. Per month the shop provides service of 78000
pieces on an average. The cost for 78000 pieces photocopy is approximately 28000
taka. As they charge the customer at 1.00 taka per copy, their total revenue
becomes about 78000 taka. As we know the their cost of goods sold is 28000 taka,
their gross profit is 50000 taka per month.

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The organization has a significant amout of fixed cost. A shop has to pay 8000 taka
as rent for store. Moreover, the cost of the assets is also fixed. Taken together, the
fixed cost for University Photocopier is 459000 taka.

All the time there work three people. They do not take any salaries for that but take
the profit at ratio of 3:4:3.

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Chapter Three
Overview of the
Tools

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 3.1Matrix: A Matrix is rectangular array of numbers. Matrices are
enclosed in grouping symbols such as parentheses or brackets. If a matrix has
m rows and n columns, the matrix is said to be of order m-by-n (m×n) or of
dimension m by n. Thus, a 5-by-4 matrix has the dimensions of a rectangle 5
(rows) down by 4 (columns) across. So, we can say that a matrix consists of
a rectangular presentation of symbols or numerical elements arranged
systematically in rows and columns describing various aspects of a
phenomenon inter-related in some manner.

3.2Cost Function: Cost function refers to the total cost which is the combination of
fixed cost and total variable cost. In other words, Cost function is an equation through which
total cost is displayed.

For example, if it costs tk. 2500 to set up the presses and machinery needed to
print and bind a paperback book. After set up it costs tk. 10 per book printed
and bound. Let x represent the number of books.

The answer can be-

The total cost is made up of the tk. 2500 setup cost (often called fixed cost) plus
the cost to make x books (often called the variable cost). Since the cost per
book is tk. 10, the variable cost to make x books will be tk. 10x. Thus, the
total cost function y is-

Y= 10x + 2500.

3.3Revenue function: Suppose x denotes the number of units a company plan to produce
or sell, usually, a revenue function R(x) is set up as follows: R(x) = (price per unit) x (number of
units produced or sold).

For example, ABC Company produces 500 units of goods (x). They sell each unit
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of goods at a price 30tk. Then the revenue function will be:

R(x) = 30x

3.4 Profit Function: Profit Function is a subtraction of “Cost function” from “Revenue
function”. That is, Profit Function P(x) = R(x) - C(x)

3.5 Break-Even Point: Break-Even refers to a situation in which businesses neither

make profit nor suffer loss. It is necessary to make certain whether the business is making
profit or not. In other words, Break- Even means that revenues must equal costs.
So since, Profit =
Revenue – Cost, Then
at break-even: Revenue
= Cost

Means that, Profit = 0.

On the Production side, the cost of operation is made up of the fixed cost plus
the variable cost for the number of units produced. The revenue depends on
the selling price and the number of units sold.

3.6 Coordinate Geometry: Coordinate Geometry is that branch of geometry in which

two real numbers, called coordinates, are used to indicate the position of a point in a plane.
The main contribution of coordinate geometry is that it has enabled the integration of algebra
and geometry. This is evident from the fact that algebraic methods are employed to represent
and prove the fundamental properties of geometric theorems. Equations are also employed to
represent the various geometric figures. It is because of these features that the coordinate
geometry is considered to be a more powerful tool of analysis than the Euclidian Geometry. It
is on this consideration that sometimes it is described as Analytical Geometry.

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Chapter Four
Problems and
Solutions

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 Problem One: Break Even Quantity and Break Even Volume

Total Cost :

Fixed cost = 8000 tk

Variable cost: 1. Paper cost = 156 Bundle × 180 tk = 28080 tk

2. Ink cost = 19 pkt × 470 tk = 8930 tk

3. Electric bill = 2500 tk

4. Repairing cost = 2000 tk

5. Damage cost = 1000 tk

Total variable cost = 42510 tk

Per unit variable cost = 42510/77000

= 0.55 tk

So total cost function, C(x) = Fixed cost + Variable cost × Quantity

= 8000 + 0.55x

Total Revenue :

Total Revenue (x)= Selling Unit × per unit selling price

=x×1

=x

Total Profit:

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Profit = Total Revenue – Total cost

= x – (8000 + 0.55x)

= x – 8000 – o.55x

= 0.45x – 8000

= (0.45 × 77000) – 8000 ; [ putting the value of x]

= 26650 tk

Break-Even Quantity:

Break even Quantity = Fixed cost / ( Selling Price – Variable cost )

= 8000 / (1 – 0.55)

= 8000 / 0.45

= 17778 units

So, if the shop can sale 17778 unites copies it neither earn profit nor suffer loss…

Break-Even Volume:

Break-Even Volume = Break-Even Quantity × Per unit selling Price

= 17778 units × 1

= 17778 tk

So, if the shop can sales 17778 tk it neither earn profit not suffer loss…

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 prices

profit line

cost line

Break-Even Point

17778 tk

(BEV)

17778 units (break-Even quantity) Quantities

The Graph: Breakeven point of University Photocopier Shops

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Problem Two: Comparison Between the Machines

University photocopiers electricity cost for machine 1, 2, 3 respectively 4, 3, 5 tk per hour. 26

days woking day in a month and 8 hours per day. INK Cost .0400, .0400 and .0335 respectively
per unit. Each machine copy 26000 unit. Monthly damages of paper 300, 400, 300 respectively
and per paper unit cost .36tk.

SOLUTION
Monthly running hours for the machines = ( 8 × 26 ) = 208 hours

M1 M2 M3

Electricity cost per hour = 4 3 5

E=[ 4 3 ¿¿

So the electricity cost C = 208 4

= 832

624

1040

Machine 2 has less electricity cost.

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 M1 M2 M3

Damages for the machine = 300 400 300

Per unit paper cost = .36 TK

Monthly damages for machine , S = .36 300 400 300

= 108

144

108

Machine2 occurs more damages than the other 2 MACHINES

M1 M2 M3

INK Cost per unit = .0400 .0400 .0335

M1 M2 M3

Per month copies = 26000 26000 26000

Monthly Ink cost for M1 = ( 0.0400 × 260000)

= 1040 TK

Monthly Ink cost for M2 = ( 0.0400 × 26000 )

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 = 1040TK

Monthly Ink cost for M3 = ( 0.0335 × 26000 )

= 871TK

SO, machine 3 has less Ink cost.

MONTHLY INK COST

MACHINE3 MACHINE2 MACHINE1

0.35

0.35

0.3

0 0 0
MONTHLY INK COST

Electricity cost matrix , S = 832

624

1010

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INK cost matrix , I = 1040

1040

871

Damages cost matrix , D = 108

144

108

E+I+D = 832 1040 108

624 + 1040 + 144

1040 871 108

= 832 + 1040 + 108

624 + 1040 + 144

1040 + 871 + 108

= 1980

1808

2019

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After adding Ink cost matrix , Damages cost matrix and Electric cost matrix by using
using matrix addition we reached to a calculation that Machine 2 will cause least cost
for the University photocopier and we recommends Machine2 for the shop as it has cost
benefit.

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Problem Three: The partners are willing to offer quantity discount. As
the competition increasing day by day, the partnership organization want
to offer quantity discount policy to survive in the market. As a
mathematician, we solve the problem using mathematical tools.
They plan to charge the customers as:
For first 100 pages at 1.00 tk per copy,
Between 100 and 150 pages at 0.95 tk per copy,
Between 150 and 200 pages at 0.90 tk per copy,
Over 200 pages at 0.85 tk per copy.

Solution:
For first 100 pages
C(x)=1*x
C(100)=1*100=100

Between 100 and 150 pages

C(x)=100+(x-100)*0.95
C(150)=100+(150-100)*0.95=147.5

Between 150 and 200 pages

C(x)=147.5+(x-150)*0.90
C(200)=147.5
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(200-150)*0.90=192.5

Over 200 pages

C(x)=192.5+(x-200)*0.85
=192.5+0.85x-170
=22.5+0.85x

As problem is not a problem always, it is the gap between where we are

and where we would like to go. That’s why we may call it a problem for
doing business in different way. So we provide them the equation which
help them to offer discount efficiently. The equations are:
i. C(x)=x [0<x<=100]
ii. C(x)=5+0.95x [100<x<=150]
iii. C(x)=12.5+0.90x [150<x<=200]
iv. C(x)=22.5+0.85x [200<x]

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Problem Four: Whether to continue business or not during vacation.

The partners of the University Photocopier want to know whether they

should continue their business during vacation or not. Upto the present
time this organization do not open their shop but now there arises a
question about this. As a mathematician, we solve the problem and help
them deciding what to do using cost and revenue function.

The fixed cost is 8000 taka per month. If they do not open business, their
cost will be 8000 taka. But an survey by them revealed that during
vacation, they get customer for 500 copy per day which results in a
11000 copy for the month.

During vacation if not continue:

Total Cost(TC)=8000+0.55x
=8000+0.55*0=8000
Total Revenue(TR)=1*x
=1*0=0
Profit=TR-TC
=0-8000
=-8000
That is net loss is 8000 taka.
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During vacation if continue:

Total Cost(TC)=8000+0.55x
=8000+0.55*11000=14050
Total Revenue(TR)=1*x
=1*11000=11000
Profit=TR-TC
=11000-14050
=-3050
That is net loss is 3050 taka.

If the organization do business during vacation, they can save money of

4950 taka. We recommended that they do business in vacation.

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