Application of Differential Calculus in Management

Managers often need to know the rate at which things change. For instance, how would the
sales volume change if the spending on promotion was increased; or how would sales volume
change if prices were changed and so on.

Calculus is particularly useful in such situations. Techniques based on calculus are used
extensively in economics, operations management, marketing, financial management and so
on.

There are two branches of calculus-differential calculus and integral calculus. Differential
calculus is used to determine the rate of change of a given function with respect to a unit
change in one of the independent variables.

Integral calculus is the reverse of differential calculus. It determines the function if the rate of
change is given.

We, as managers, are more concerned with differential calculus.

The discussion shall also be limited to those functions that are normally encountered by
managers. We shall, therefore, ignore trigonometric functions, logarithmic functions and so
on.
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