2.

51
APPLICATION OF MATRICES TO BUSINESS AND
ECONOMICS
BUSINESS MATHEMATICS
2.50
Augmented matrix is constructed as:
1.
Solution:
0 3 3|600
The implicit and explicit data embodied in this example reality can be tabulated as
under:
5 3 2 480
4 2 2420
Drilling Turning Grinding
2. Applying the row operation R, > R, - R
Type
Type I -6 0 0-30
Type III 5 3 2 480
Tme available (in minutes)10 x60 600x 60480 7x60 420 4 2 2 420
Let x X and a, denote the number of brackets of Type I, II and III required to he
3. Applying R, > R, - R
produced, then we have
Ox, +
3x, +3x, =
600 -6 0-30
+
3x, + 2x, = 480 1 1 o 60
5x,
4 2 2 420
4x, +
2x, + 2x = 420
in matrix form follows: substitution
The above system of equations can be expressed as
Since matrix A has been reduced to lower triangular form, the forward
0 3 3|| under:
600 may be applied as
5 3 2 | , =480 -6x, =-30 X =5 (1)
l42 2 420 t 60 .(2)
420 (3)
A X = B 4x, +
2x, + 2x, =
6- 6 -12 0, therefore A-' exists. Substituting x, = 5 in Eqn. (2) above, we get
AI = D =
O(6 -
4) -
3(10 -
8) + 3(10- 12) =
0 - =
5 +X = 60 55
Using Cramer's Rule, we get
Substituting x = 5 and z, = 55 in Eqn. (3) above, we get
| 600 3 3
480(0) + 420(6 9) =
1200 1260 =-60 4x5+2 x 55 + 2x, = 420
D, 480 3 2 600(6- 4) -
420 2 2 2x 420 20= 110 290
Therefore, - 6 0 = 5 x 2
=145
D -12
0 600 3 Therefore, numbers of brackets produced of Type I, II and III are 5, 55 and 145
D, 5 480 2=0-5(1200 1260) + 4(1200 1440) 300 960 =660
=
respectively.
420 Example 2.41. Material, labour and finishing costs for manufacturing three guitar
4 2|
models are given in the table below:
-660
Therefore, 55
-12
Guitar Model Cost
0 3 600 Material Labour Finishing
D, =
5 3 480 =-5(1260- 1200) + 4(1440 1800) =-300- 1440-1740 200 500 100
4 2 420 100 200 300
Therefore, = -1740 145 300 200 300
In a given week 71,80,000 is used for labour, ? 140,000 is used for finishing and
be used to solve the system of linear equationsS 1,20,000 used for materials. How many of each model should be produced to use
Alternatively, the Gaussian Method can
using the following steps. exactly each of these allocations? (Delhi Univ. B.Com. Hons., 2008, 2010)
 BUSINESS MATHEMATICS APPLICATION OF MATRICES TO BUSINESS AND ECONOMICS 2.53
2.52
Solution: Example 2.42 A sales man has the following record of sales during three months
period in respect of items: A, B and C, which have different rates of commission.
Let x, and x, be the units of guitar models A, B and C produced per week
respectively, then Sales in Units Total Commission
Months
200x, +100x, + 300x, = 120000
(Material cost) in )
500x, +2004, + 200x, = 180000
(Labour cost) January 90 100 20 800
100x, + 300x, + 300x, = 140000
(Finishing cost) February 130 50 10 900
The above equations can be expressed in matrix form as: March 60 100 30 850
200 100 300||| |120000 Find out the rate of commission on items A, B and C (per unit).
(Delhi Univ., B.Com. Hons., 2006, 2013)
500 200 200 =
180000
100 300 300||x 140000 Solution:
A B Let , 72 and x, denote the rates of commission (in 3) on each of the items A, B and
C, then we have
IAI 200(60000 60000) 100(150000 20000) +300(150000 20000)
90x, +100x, + 20x, =
800
= 0 -13000000+39000000 26000000
130x, + 50x, + 40x, 900
Since 1A # 0, A* exists. Accordingly,
60x,100x,+30x, =850
60000-40000
adj A 1 -130000 30000 110000
The above system of equations can be expressed in matrix form as follows:
26000000 130000 -5000010000
90 100 20| 800
900
130 50 40
60000 -400001 120000 60 100 30*) 850
X =AB= -130000 30000 110000 180000
A X B
26000000 130000 -50000 -10000 140000 The determinant of coefficient matrix A:
A = 90(1500 4000) - 100(3900 2400) +20(13000 - 3000)
0x12+60000x18+(-40000) x14
-130000x12 +30000x18+110000x14 =-225000 150000 + 200000 -175000 # 0, therefore A- exists.
2600|
130000x12 +(-50000)x18+(-10000)x14] Using the Cramer's Rule, the values of x,, x, and x, are computed as follows.
800 100 20
520000 200 D, = 900
520000 200 50 40
2600 520000 200 850 100 30
800(1500 4000) - 100(27000 34000)+20(90000 42500)
Therefore, 200 units each of guitar models A, B and C should be produced per week.
=
-2000000 + 700000 + 950000 =
-350000
2.3.6 Seling Prices and Sales Commission
Therefore, D
A -350000 2
The mathematical tool of matrices can be used in the following business situations -175000
concerning determination of selling price and rates of sales commission:
800 20
When the sales in units and total commission is given, then the rate ofcommission D 130 900 40
per unit can be estimated for each item.
When the amount of sales and total commission is given, the rate of commission 60 850 30
as a percentage of sales of each item can be computed. 90(27000 34000) - 800(3900 - 2400) + 20(110500 54000)
.When the sales in units, total commission and rate of commission are given, the -630000 - 1200000+ 1130000 = -700000
selling price of each product can be determined.
Therefore, X2
D 700000 :4
A -175000
2.54
BUSINESS MATHEMATICS APPLICATION OF MATRICES TO BUSINESS AND ECONOMICS 2.55
90 100 800
Therefore, X A-216
D, -648 3
D, 130 50 900
60 100 850
8 116 4
90(42500- 90000) -
100(110500 54000) + 800(13000 3000) D = 11 119 7 = 8(714 672) - 116(66 - 42) + 4(1056 714)
4275000 5650000 + 8000000 =
-1925000 6 96 6
Therefore. D-1925000 =11
=
336 2784 1368 = -1080
X3 A -175000 080
Therefore, the rates of commission per unit are 2, 74 and 711 for items A, B and Therefore, A=IE 5
C respectively.
|8 12 116
Example 2.43 The sales made by a salesman and the commission received by him D, = |11 6 119 8(576 714) 12(1056 714) + 116(66 - 36)
in the last three weeks is given below:
6 6 96
Weeks Sales in Units -1104- 4104 + 3480 -1728
Product A Product B Product Total Commission (in
-1728 8
120
60
160 Therefore,
,A-21
1190 Thus, the rates of commission on products A, B and C are 73, 75 and T8 respectively.
60 960
Example 2.44 A salesman has the following record of sales during three weeks of
Using matrix algebra, find the rates of commission on product A, B and C respectively. a particular month in respect of items X, Y and Z, which have different percentage
(Delhi Univ, B.Com., Exlernal 2011) rates of commission:
Solution:
Let x, I and x, denote the rates of commission (in ) on each of the items A, B and Weeks Sales in Thousand Rupees Total Commission (in
2
C, then we have
First 500 100 200 7000
80x+120x, +40x 1160
110x, +60x, + 70x, = 1190
Second 300 600 400 9000
60x, + 6 0 , + 60x, = 960
Third 600 400 200 9500
Find out the rates of commission on items X, Y and Z
In order to simplify calculation, divide each of the above equations by 10. Accordingly,
the above system of equations can be expressed in matrix form as follows: Solution:
12
116 Let , X and z, denote the rates of commission (in percentage) on each of the items
8 X, Y and Z respectively, then we have
11 6 119
500x 100x, 200x3
6 6 96 100 100 100
7 5x, + z + 2x, =F7
A X B
The determinant of coefficient matrix A is computed as: 30076002 4003 3 x , + 6x + 4x = 9
100 100 100
AI =8(36 42) 12(66 42) + 4(66 36)
600x 400x 200x= 9.5 6x, + 4x + 5x = 9.5
48 288 + 120 -216 # 0, therefore A-l exists. 100 100 100
Applying the Cramer's Rule, the values of x, z and x, are computed as follows. The above system of equations can be expressed in matrix form as follows:
|116
12 5 1 2 x
D, =119 6 116(36 42) 12(714 - 672) + 4(714 - 576)
3
96 6 6 4 9.5
= -696 504 + 552 = -648 A X =B
 2.56 BUSINES MATHEMATICS
APPLICATION OF MATRICES TO BUSINESSAND ECONOMICS
The determinant of coefficient matrix A is computed as:
2.57
Simplifying the above set of linear equations, we get
AI = 5(12 16) - 1(6 24) + 2(12 36)
40x, +30x, + 60x, = 16600
-20+ 18 - 48 =
-50, # 0, therefore A-l exists. Accordingly, 50x, + 60r, + 50x, = 19700
18 -24
60x, + 75x, + 40x, = 21000
Cof(A) 6 -2
-14 The above system of equations can be expressed in matrix form as follows:
-8 -14 27
40 30 60 16600|
6 -8
50 60 50||x,| 19700
adjA 18 -2 -14
60 75 40| 21000
-24 -14 27
A B
The determinant of coefficient matrix A is computed as:
-2 -14
1A 40(60 x 40 75x 50) 30(50 x 40 60 x 50) + 60(50 x 75 60 x 60)
B0-24 -14 27
The solution is given by X = A*-B as shown below:
=
40(-1350) -
30(-1000) + 60(150) =-54000 + 30000 + 9000 =
-15000 0,
therefore Al exists. Accordingly
4 6
-87 -1350 1000 150
X 18 -2
-14|9 Cof(A)= 3300 -2000 -1200
-24 -14 27 9.5 -2100 1000 900
4x7+6x9+(-8)x9.5 -1350 3300-2100
adjA) = |
18x7+(-2)x9 +(-14)x9.5 1000 -2000 1000
24x7+(-14) x9+27x9.5 150 -1200 900
-50 1.00 0.09 -0.22 0.14
[-1350 3300-2100
50 25=0.50 1000-2000 1000
-37.5 o.75 A-= 15000
150 -1200 900
15
Thus, x = 1%, x, = 0.5% and x, = 0.75%, implying the rates of commission on products -0.01 0.08 -0.06
X, Y andZ are 1%, 0.5% and 0.75% respectively. The solution is given by X = AB as shown below:
Example 2.45 A salesman has the following record of sales a
during three weeks of 0.09 -0.22 0.14 16600
the
particular month in respect of items P, earns Q and R. He
rate of 1%, 1.5% and 2% respectively. The details of sales and commission are given
sales commission at
X = 19700
below: 15 15 15
-0.01 0.08 -0.0621000
Sales in Unius Total Commission
Weeks 0.09x16600-0.22x19700+0.14x21000
First 1000 2000 3000 16600 x16600+x19700 21000
5 15 15
Second 5000 4000 2500 19700 -0.01x16600 +0.08x19700-0.06 x21000
Third 6000 5000 2000 21000 a 1494-4334 +2940
Find out the selling prices of items P, Q and R. 100
-16600+39400 -21000
Solution: 15 120
have 150
Let Rx, az and Rx denote the prices (per unit) of items P, Q and R, then we -166+1576-1260
4000(0.01)x, + 2000(0.015)x, + 3000(0.02)x,
=
16600 Thus, x, 100, x, = 120 and x 150
19700
5000(0.01)x, + 4000(0.015)x, + 2500(0.02) x
=
Accordingly, prices of items P, Q and R are 100, 7120 and T150 respectively.
6000(0.01)x, + 5000(0.015)x, + 2000(0.02) x, =
21000
 BUSINESS MATHEMATICS
2.58 APPLICATION OF MATRICES TOBUSINESS AND ECONOMICS 2.59
Example 2.46 The salesman has the following record of sales during three weeks
for the three items X, Y and Z which have different rates of commission.
0.7x 270-0.3x 450-0.2x260 |
0.6x260
-1.9x270 +0.8x 450 +
Weeks
Units Sold Total Commission 1.5x270-0.6x 450 -0.5x260
(in
270
189-135-52 2
-513+360+156=3
50 40 450
60 30 260
405-270-130 5
items X, Y
Find out, using matrix method, the rates of commission on items X, Y and Z respectively.
Thus, x =
=
2; x, 3 and x, 5. Accordingly, the = rates
of commission on
and Z are 2, 73 and 75 per unit respectively.
(Delhi Univ., B.Com. Hons., 2006)
2.3.7 Product Requirement and Usage
Solution:
The mathematical tool of matrices may also be used to determine the requirements to
Let x, X2 and x, denote the rates of commission per unit on each of the items X, Y
and Z respectively, then we have produce predetermined units of commodities. Two types of applications, as mentioned
below, have been highlighted in the examples that follow.
40x, +30x, + 20x, = 270
Determining the requirement of inputs to render a service.
50x, + 50x, + 40x, = 450
Determining the requirement of materials, viz. raw materials, machine hours and
60x, +30x, + 10x, =
260 labour requirements for production.
The above system of equations can be expressed in matrix form as follows: Example 2.47 To control a crop disease, it is necessary to use 8 units of chemical A,
30 20 14 units of chemical B and 13 units of chemical C. One barrel of spray P contains
40 270|
1 unit of A, 2 units of B and 3 units of C. One barrel of spray Q contains 2 units of A,
50 50 40|x= 450
3 units of B and 2 units of C. One barrel of spray R contains 1 unit of A, 2 units of B
60 30 103 260 and 2 units of C. Find how many barrels of each spray will be used to meet the
A X B requirement. Solve by matrix algebra. (Delhi Univ., B.Com. Hons., 2007, 2009, 2015)
The determinant of coefficient matrix A is computed as:
Solution:
A =
40(50 x 10 3 0 x 40) 30(50 x 10 60 x 40) + 20(50 x 30 60 x 50) Let , 1 and x, denote the barrels required of spray P, Q and R respectively.
28000+ 57000 30000 = -1000 #0, therefore A-i exists. z +2x + x = 8 (Units of chemical A contained in required barrels of P, Q and R)
-700 1900 -1500 2x +
3x, + 2x 14 (Units of chemical B contained in required barrels of P, Q and R)
Cof(A) = 300 -800 600
3,+2x + 2x, 13 (Units of chemical C contained in required barrels of P, Q and R)
200 -600 500 The above system of equations can be expressed in matrix form as follows:
-700 300 2001 1
adj A =
1900-800 -600
(-1500 500 600 3 2 13
A = IA a d j A A B
The determinant of coefficient matrix A is computed as:
-700 300 200 0.7 -0.3 -0.2
Al 1(6 4) 2(4- 6) +1(4 9) = 2 +4 - 5 1 #0, therefore A- exists.
1000
1900 -800 -60o=|-1.9 0.8 0.6 2 2
-1500 600 500 1.5 0.6 -0.5
Cof(A) = -2 4
The solution is given by X = A-1B as shown below:
1 0
0.7 -0.3 -0.2] 270
X = -1.9 0.8 0.6 450 adj A =
1
o
1.5 -0.6 0.5|260
 BUSINESS MATHEMATICS APPLICATION OF MATRICES TO BUSINESS
AND ECONOMICCS 2.61
2.60
-6 -21
A- =adj
A A adjA=9 -3 10
2 8 -12
[2 -6 -2
-5 4 A 10
-1
The solution is given by X = A-'B as shown below
8 -12
by X A-lB as shown below:
The solution is given
=
8
x=21 O14 4 -6 238 [4x38+(-6)x26 + (-2)x31
-5 4-1 13 10|26 22
-9x38+ (-3) x 26 +10x31
[ 2x8-2x14+1x13 2 8-12|31) 2x38+8x 26+(-12)x31
2x8-1x14+0x13
-5x8+4x14-1x13
- 4
-19 -3
-6 -2 38
10 || 26
[4x38+ (-6) 26+ (-2)x 31
-9x38+ (-3)x26+10x31
x
Therefore, 1 barrel of P, 2 barrels of Q and 3 barrels of R are needed. 8 -12|31 2x38+8x26+(-12)x31
Example 2.48 The production process to produce a medicine requires three types of to meet the necessary
Therefore, 3 kg of X, 5 kg of Y and 4 kg of Z need be used
materials: 38 units of material A, 26 units of material B and 31 units of material C. requirement for producing the medicine.
These materials are found in three herbs X, Y and Z. One kg of X contains 2 unit of
2.3.8 Transportation Capacity and Rates
A, 4 units of B and 3 units of C. One kg of Y contains 4 units of A, 2 units of B and
2 units of C. One kg of Z contains 3 unit of A, 1 units of B and 3 units of C. Find Broadly viewing, the following transportation cases have been exemplified by using
how many kg of each type of herb need be used to just meet the requirement. Solve the mathematical tool of matrices:
by matrix algebra. Determining the required number of vehicles which have varying transportation
to transport the given quantity/number of itemns.
capacities
Solution:
Let x, and x, denote the required quantity (in kg) of herbs X, Y and Z respectively Determining the quantity of items that can be transported using a given number
then: of different transportation vehicles having varying transportation capacity.
38 (units of Material A contained in the three herbs) Estimating the transportation eharges per vehicle when different vehicles having
2x +4x, + 3x
=
different transportation capacities for varying items are used.
26 (units of Material B oontained in the three herbs)
4x, +
2x, +lx, =
(units of Material C contained in the three herbs) Example 2.49 A transport company uses three types of trucks T,, T2 and T, to
3x, +2x, +
3x =
31
transport three types of vehicles V, V2 and V. The carrying capacity of each truck
The above system of equations can be expressed in matrix form as follows: in terms of three types of vehicles is given below:
38 V
| 26| 3
A B
The determinant of coefficient matrix A is computed as:
36 +6 =-22 + 0, therefore A exists.
Al =
2(6- 2) -
4(12 3) +
3(8 - 6) =
8 -
Using the matrix method, find
Accordingly, 0 the number of trucks ofeach type that are required to transport 85,105 and 110
-9 vehicles of types V, V2 and V, respectively.
CofA) = 6 (i) of
the number
20 and 30
vehicles of each type which can be transported if company has 10,
-2 10 -12 trucks of each type respectively. (Delhi Univ, B.Com. Hons., 1999, 2006)
2.62 BUSINESSMATHEMATICS APPLICATION OF MATRICES TO BUSINESS AND ECONOMICS 2.63
Solution: expressed by the column matrix C as under:
(i) Using System of Linear Equations: If x, X, and x, denote the number of trucks of
each type required to transport vehicles, then: T10
C T20
,+24, + 3x, =
85
T30
3,+2x,+ 2x, =
105
each type which be transported is obtained
110
The total number of vehicles of can
2x, +
3x, +21, =
The above system of equations can be expressed in matrix form as follows: 1 2 3||10 140
851
105 c-a 140
A X B
It implies that the number of vehicles V, V, and V,
the given number of trucks are 140, 130 and 140 respectively.
which can be transported by
The determinant of coefficient matrix A is computed as:
Example 2.50 A transport company uses three types of trucks T, T, and T,
too
transport three types of materials A, B and C. The carrying capacity of each truck
AI = 1(4 - 6) 26-4) +3(9 4) = -2 - 4 + 15 = 9 # 0, therefore A- exists.
below:
in tons with respect to each of the three types of materials is given
Accordingly,
5 -2 5
-2 Material A Material B Material C
Cof(A) = | 5
4
-2 5 -2
The transport company transported 184,332 and 280 tons of materiafA, B and
C respectively, by charging 1160 thousand for all the trucks taken together. Rate
X = AB charged in respect of T, is double the rate charged in respect of T, the rate charged
in respect of T, is 1.5 times the rate charged in respect of T,. Find out the rate
-2 85 -170+525-220 135 charged by transporter for each type of truck.
-2 7 x105--170-420+770-180 Solution:
425+105-440 90 Using System of Linear Equations: If x, X2 and x, denote the number of trucks of
15 types T, T, and T, respectively, then
20 implying that 15, 20 and 10 trucks oftypes T, T, and T, respectively 5x, + 3x +2x = 184
10 4x +8x +6x= 332
are required to transport the given vehicle types.
4x,+6x, + 4x =
260
(i) Using Multiplication of Matrices: The above system of equations can be expressed in matrix form as follows:
The capacity of each truck to carry number of vehicles of various types may be
matrix A: 5 3 184
represented by the following
T T Ts 332
V,12 3
6
260
A = V3 2 A B
V2 3 The deternminant of coetticient matrix A can be computed as:
A 5(32 36) 3(16 - 24) + 2(24 32) = -20 +24 16 -12 # 0, therefore A-
The number of trucks of various types that are used to transport vehicles may be
exists.
 2.64 BUSINESS MATHEMATICS APPLICATION OF MATRICES T BUSINESS AND ECONOMICS 2.65
Accordingly. The solution is given by R
=
A-'B as shown below:
-4 8 -8
[-4 2 14 -44]11601 2x1160+14x0+(-44) x0
CoftA) = 0
2
12
-22
-18 and adj A = | 8
28 -8
12
-18
-22
28
R=
116
3 21 o 3 3x1160+21x0+50x0
1-51 -22| 0 **|1x1160 + (-51) x0 +(-22) x0
0
2320+0+0 23201 20
AA adA) 1 -22| 3480 +0+0 3480 30
The solution is given by X = A-'B as shown below:

-8 -18 2 8
1160+0+0 116 1160 10
Therefore, 20,000, 730,000 and 10,000 are charged for a truck each of the types
4 0 2 1184
T. T and of T, respectively.
X= 8 12 -22 332
X 12*-8 -18 28 260 2.3.9 Determination of Equilibrium Prices
demand
Matrices can also be used to determine the equilibrium prices when the
4x184 +0x332 +2x260
function and supply function are known. This is achieved by transforming the given
8x184+
12
12x332+ (-22)x260 demand and supply functions into a system of linear equations as
shown in the
following examples.
-8x184 +(-18) x332+28x260
Example 2.51 The equilibrium conditions for two substitute goods is given below:
-736+0+520 [-216 18
16
1472+3984-5720 -264=22 5p, 2p =
15 and -P +
8p =
Use matrix algebra to find the equilibrium prices.
-1472-5976+ 7280 1-168 (Delhi Univ., B.Com. Hons. 1993, B.Com. 2011)
Therefore, 18 trucks of type T, 22 trucks of type T, and 14 trucks of type T, have Solution:
been employed to transport the materials A, B and C respectively. Under the conditions of equilibrium, the system of linear equations appears as under
Now let , r and r, denote the rates charged per truck for T, T, and T, respectively.
5p, -2p, 15
then
16
P +8p
=
18r,22r +14r, 1160 The above system of equations can be expressed in matrix form as follows:
2r T+Or-2r, = 0
T1.5r -1.5r + r2 + Ors = 0
The above system of equations can be expressed in matrix form as follows:
A B
18 22 1160 The determinant of coefficient matrix A can be computed as:
1 0
A 5(8) --2-1) = 40 2 38 + 0; therefore Al exists. Accordingly,
-1.5 1
A R B
The determinant of A can be computed as:
Al =
18(0 +2) -
22(0 3) +14(1 -0) =
36 + 66 14 116 # 0, therefore Al exists.
Accordingly,
2 3 1 2 14 44] Since X = A-'B, we get
Cof(A) = 14 21 -51 and adj A = |3 21 50
-44 500 -22 -51 -22 s2x19 8x15+2x161152
2 14 -44 381 s|l16 381x15+5x16 35 95 l2.5
A TadiA) =31161 -51
A 21 50 Therefore, equilibrium prices of substitute goods are 4 and 2.50.
-22
2.66 BUSINESS MATHEMATICS APPLICATION OF MATRICES TO BUSINESS AND ECONOMICS
2.67
Example 2.52 The joint demand and supply functions of the two commodities are
Solution:
as under:
Under the conditions of equilibrium, the system of linear equations appears as under:
Commod Demand Supply 11p P,-Pa - =
31
P , +6p, - 2p, = 26
15p
P 2p, + 7p = 24
92 P P The above system of equations can be expressed in matrix form as follows:
Using the matrix algebra. determine the equilibrium prices and quantities. 11 -1
(Delhi Univ., B.Com. Hons., 2004 Bhutan Centre)
-16
Solution: -1-2
Under the conditions of equilibrium, Demand = Supply therefore, A X B
18p, P2 = 87 The determinant of coefficient matrix A is computed as:
82 3p, + P = 15p, -5 (Equilibrium condition for x,)
92 +2p,-4p = 32p, - 6 2P, -36p, =-98 (Equilibrium condition for x,) A 11(42 4) -
(-1))-7 - 2) + (-1)(2 + 6) = 418 -
9 -
8 =401 # 0; therefore
The above system of equations can be expressed in matrix form as follows:
A exists
38 9 8 38 9
81
Cof(A) = |9 76 23 : adj A =|9 76 23
23 65 8 23 65
A X B
38 9
The determinant of coefficient matrix A can be computed as:
A =
-2) = -648 +2=-646 +0, therefore A" exists.
18-36) -
Accordingly,
AA ad A 401 9
8
76
23
23
65
17 Since X = AB, we get
A' A a d A 646-2 1
38 9 831 38x31+9x26 +8x24
P
Since X =A*B, we get P 9 76 23|| 26 9x31+76x26+23x24
4018
23 65 24
8x31+23x26+65x24)
1
1178+234 +192] [1604| 4
-1-36x87+1x(-98) -1 -3230 401 279+1976+552=- 2807 7
646-2x87+18x(-98)] 646-1938 248+598+ 1560 401|2406
Therefore, equilibrium prices are 4, 7 and 76 in the three markets.
Accordingly, P, =
5 and p, =3, substítuting the prices we get equilibrium quantities as:
= 82 3(5) +3 70 =
2.4 MISCELLANEOUS PROBLEMSs
=
92 2(5) -
4(3) = 90
x
of commodities x and x, R5 and 73 respectively and Example 2.54 Amixture is to be made containing
x kg of food A. y kg of
food B and
Therefore, equilibrium prices
their quantities are 70 and 90 units respectively.
are
kg of food C. The total weight of the mixture to be made is 5 kg. Food A contains
400 units of vitamins per kg and B and C contain 300 and 100 units respectively.
The 5 kg mixture is to contain a total of 1500 units of vitamins. Foods A, B and C
Example 2.53 The equilibrium conditions for three related markets are given by
contain respectively 300, 600 and 700 calories per kg and 5 kg mixture is to contain
11p, -P2 - P3 31; P *
öp2- 2p, =
26; -P, -
2p2 +
7P, =
24 a total of 2500 calories. Derive general solution for x and y in terms of so that the z
matrix inversion, find the equilibrium prices for each market. kg mixture contains the required 2500 calories. Find the composition of the mixture
in terms of foods A, B and C.
Using (Delhi Univ., B.Com. Hons., 2005)
(Delhi Univ., B.Com. Hons., 1994)
2.68 BUSINESS MATHEMATICS APPLICATION OF MATRICES TO BUSINESS AND ECONOMICS 2.69
Solution: nccounts was 10,000. During the month, he first withdrew a sum of 7500 from his
current account and then the balance in his savings account was half of his current
For the given x, y and z weights of food A, food B and food C respectively, the analysis
account balance. He made the next withdrawal from his 1CICI bank account of T1,000
of above problem reveals that:
and then the balance in his 1CICI bank account was double the difference between
x+yt z =
5 (Total weight of mixture) bis current account and savings account. By using the concept of matrix, find his
400x + 300y +1002 = 1500 (Vitamins contained in each food) initialbalance at the beginning of the month in these acounts. Assume that there
is given by the banks.
no interest (Delhi Univ., B.Com. Hons., 200)
300x + 600y + 7002 = 2500 (Calories contained in each food)
Solution:
The above system of equations can be expressed in matrix form as:
Let x, xz and Rx, be the initial deposits in current account, savings account and
6 ICICI bank account respectively, then the following relationships exist:
tx, =
100000 (Initial credit balance)
t
A X = B -500) = *2 x, -2x, =
500
The determinant of coeficient matrix A: (Relations between current and savings alc balance)
IA =
1(21 -
6) 1(28 - 3) +
1(24 9) = 15 25
+15 5 0, therefore A-" exists. - 1000) = (a, - 500) x 2x, - 2x, - X, = 0
Accordingly, (Relation between ICICI and other a/c balance)
15-25 15 In matrix form, above equations appear as under:
Cof(A) =-1 4 3
10000
2 3
500
1 15 -1 -2
A B
adj A =|-25 4
15 -3-1 Using the Cramer's Rule, the values of x, X2 and x^ are computed as under:
TAl = 1
1 1
-2 0 = 1(2 - 0) - 1(-1 +2) + 2(0 2)
4TaA=-25 4
2 -2 -1
2 1 +4 =
5
X A-BB
15 -1-2| 5 | 10000 1 1
D,=500 2 0 10000(2 - 0) 500(-1 + 2)
-25
515 -3-1|25 -2
-1|
= 20000- 500 19500
[15x5+(-1)x15+(-2)x25
-25x5+4x15+3x25 Therefore, 19500
-=3900
5
15x5+(-3) x15+(-1)x25
1 10000
[ 75-15-50 1-500 + 0) 1(-10000 + 0) +2(0 500)
D =|1 500
-126+60+75=1
75-4525 of food C.
2 0
-500 + 10000 1000 8500
Therefore, the mixture contains 2 kg of food A;
2 kg of food B and 1 kg
Example 2.55 A person has his current account and savings account in
a nationalised
Therefore, D8500
D =1700
in all these
bank and a multiple purpose account in ICICI bank. Initial credit balance
 AND ECONOMICS 1
2.70 BUSINESS MATHEMATICS PPLICATION OF MATRICES TO BUSINESS
A is produced by combining 1 unit land, of
1 1 10000 Example 2.56 One unit of commodity
and 5 units of capital. One unit of B is produced by combining
nits of labour
D,=12 500 = 1(1000 + 0) 1(20000) + 2(500 +20000) 1 unit of capital, one unit of C is produced by
9 units of land, 3 units of labour and the prices of A,
2 -2
ombining 3 units of land, 1 unit of labour and 2 units of capital. If
com and rate of
R and C are*27, R 16 and 19 respectively, find the rent R, wages W
1000 20000 + 41000 22000 (Delhi Uniu., B.Com. Hons., 1982 (CC), 2018)
interest 1.
D_22000 = 4400 Solution:
Therefore, 7, 5
rate of interest per unit of land, labour
Civen that R, W and I denote rent, wages and
Alternatively, the Gaussian Method (with forward substitution) can be used to solve and capital respectively, the following equations are obtained by equating the price
the system of linear equations using the following steps: used with the equilibrium price of commodity A, B and C.
of inputs
1. Augmented matrix is constructed as 1R + 2W+ 5I = 27 (Commodity A)
1 10000 2R + 3W + 1I = 16 (Commodity B)
3R+ 1W+ 21 19 (Commodity C)
2-2-1 0 The above system of equations
can be expressed in matrix form as below:
2. Apply R,> R, + R, and accordingly get
1 2 51R] [27
0 10000
0 500 19
-2-10 1 251"[27]
3. Now we apply R, > R, - 0.5R, and get 1 16
|2.5 0
3 1 2 19
09750
1-2 0 500 (6-1) 4-5) (2-15) 127
-2-10 1(6-1)-2(4-5)+3(2-154-3) (2-15) 1-10) 16
The matrix A stands transformed into lower triangular matrix, accordingly, using
(2-9) -1-6) (3-4)19
forward substitution, we get 5 1 -13 27
1 -1 -13 9 16
2.5x, = 9750 x 9750 3900 .1) 5+2-39
2.5 -7 5 -1 19
-2x, = 500 ..(2)
5(27)+1(16)-13(19)
-32-1(27)-13(16) +9(19)
2x- 2x- =
0
Substituting x, = 3900 in Eqn. (2) above, we get -7(27)+ 5(16) -119)
3900 21, = 500 -2x -3400 1700
= x, =
135+16-2471
Substituting x, = 3900 and x, = 1700 in Eqn. (3) above, we get -27-208+171|
2 x 3900 - 2 x 1700 x , = 0 *s 0- 7800+ 3400 =-4400 -32-1894+80-19J
4400 -96
X3 **=
-1
4400 -64
Thus, the initial deposit in current, savings account and ICICI account is 3,900,
1,700 and 74,400 respectively.
32128
aus, the rent, wage and rate of interest are 73, 72 and R4 per unit respectively.
 BUSINESS MATHEMATICS APPLICATION OF MATRICES TO BUSINESS AND ECONOMICS 2.73
2.72 =[10 x 2+ 15x 4+ 12 x 5 10x3+ 15x2+ 12 x4 10x 1+ 15 x3+ 12x2]
the mix-up of
Example 2.57 A firm produces three products: P,. Pz and P, requiring
for each
three materials M, M2, and Mg. The per unit requirement of each product P P2 P
material (in units) is given below: =
[140 108 79]
Thus, the cost of production per unit of product P,, P, and P, is 7 140, F108 and
79 respectively.
P cost of production
= cost per unit X
production units =
(CA) xB
(iit) Total
1001
Using matrix notations, determine:
=
[140 108 79] 200 =
[14000+ 21600 + 23700] =
|5930o
) Total requirement of each material if the firm produces 100, 200 and 300 units 300
of three products respectively. Thus, the total cost of production is <59,300.
(i) Per unit cost of production if cost per unit of three materials is 10, T15 and R12
respectively.
(ii) Total cost of production. (Delhi Univ, B.Com. Hons., 2013)
EXERCISESS
1. Mr. X wishes to purchase 5 kg of sugar, 30 kg of flour and 2 kg of salt. In a shop
near to Mr. X's residence, these commodities are priced at R 40, 730 and 12 per kg;
Solution:
in the local market these commodities are priced at 7 36, 728 and 710 per kg
()Let matrix A denote the requirement (in units) of materials M, Mg, and M, per
whereas in nearest mall these commodities are priced at 34, 26 and 9 per kg
unit of products P1, P2 and Pp
respectively. If cost of travelling to local market is 25 and that to nearest mall
P P2 Ps is 50, determine the total expenditure the
under each of the options and decide
best course of action for Mr. X, using matrix multiplication method.
M, 2 3 1
A M,4 2 3 2. X, Y and Z went to the market and purchased same type of products but in different
M,5 42 quantities. X purchased 5 spoons, 7 bowls and 3 plates. Y purchased the three
things in equal quantities, aggregating tol2. Z purchased spoons, bowls and
matrix B
The production (in units) of the firm may be expressed by the column 8 plates. If cost of each spoon, bowl and plate is T1, R2 and 73 respectively, ind
as under: out the total amount spent by X,Y and Z individually.
P[100 (Delhi Unir., B.Com. Hons., 2012)
B P200 3. A manufacturer is engaged in the production of three products X, Y and Z, which
P300 are sold in three different markets A, B and C. The annual sales of these products
in these markets are tabulated below:
The total requirement of each material is obtained as:
Products (units in thousands)
2 3 1 100 200+600+300 1100 Markets X
A xB |4 3 200= 400+400+ 900=1700
A 10 8
4 2 300 500+800+ 6001900
B 12 10
M, M2, and M, is 1100, 1700 and 1900
Thus, the total requirement of materials C 8 12 14
units respectively.
Let the per unit cost of materials be expressed as: You are required to find out:
ii)
M, M, M i) Selling price of each product, if the total revenue in thousands of rupees) from
C [10 15 12] these markets is 7942, 71128 and 1252 respectively.
(ii) the gross profit (in thousands of rupees) from these market, if the cost of
The cost of production per unit can be computed as:
producing these products per unit are 734, F26 and T28 respectively.
P P2 P 4. An investment company has offices located in every division, every district and
M, M M M,2 3
CxA = [10 15 12] x M,|4 2 3 every zone in a certain state. Assume that there are 10 divisions, 30 districts and
200 zones in the state. Each offce has one head clerk, two fve cashiers, clerks
M,5 4 and three peons. A divisional office has, in addition, 2 office superintendents,
 ECONOMICS 2.75
TO BUSINESS AND
BUSINES6 MATHEMATICS APPLICATION OF MATRICES
2.74 constituents used for three
The following
matrix gives the proportionate mix of
2 clerks, one typist and one peon. A district office has, in addition, one clerk, 9.
fertilisers:
two typists and two peons. The basic monthly
salaries are as follows: Office
Clerk and Typist Constiluents
superintendent 10,000, Head clerk 8,000, Cashier T5,000,
73,000 each and Peon {2,000. B C D
Fertilisers A
Using matrix notation, find: 0.5 0.1 0.3 0.1
offices taken together.
(i) The total number of posts of each type in all the Y 0.2 0.1 0.2 0.5
office.
(i) The total basic monthly salary bill of each kind of 0.2 0.2 0.2 0.4
taken together.
Z
(ii) The total basic monthly salary bill of all the offices week, 20% being fertiliser X, 50%
5. Mr. X invested a part of his investment in 10% Bond A and a part in 12% Bond B, (i) If sales are 1000 tins (of one kilogram) per how much of each constituent
being fertiliser Y and 30% being fertiliser Z,
and remaining in 9% fixed deposits. His interest income during the first yearis is used.
Bond B,
15,600. If he invests 10% more in 10% Bond A and 20% more in 12%
(it) If the cost of each constituent is 60 paise, 70 paise ,80 paise and 100 paise per
his income, after additional investments, increases by1,860. His investment tin of each fertiliser cost?
how much does kg
in Bond A is 1.5 times that in Bond B and fixed deposits taken together. 100grams respectively,
A and and
Find out his initial investment and the additional investments in Bond three types of machines: automatic, semi-automatic
10. A shoe factory employs
each of these machine
Bond B using matrix method.
manually operated. The average number of shoes produced by
while the daily output of factory is 178 shoes
6. Suraj Foundry produces the screws of lengths 1 inch, 2 inches,
2.5 inches and types is 12, 6 and 4 respectively
50% of the semi-automatic machines
3 inches. During January, 2002 the number of 1 inch screws produced
is 28,800; by all these machines. On a particular day,
automatic machines were not used
2 inch ones 24,960; 2.5 inches ones 17,280 and 3 inches ones 11,520.
Each one and manually operated machines and 2/3 of
As a to 69
result, the output of factory reduced
minute of because of maintenance reasons.
inch screw requires 4 seconds of machine time, 15 grams of iron, and 1 have been employed by
22 grams shoes. Find the number of each type of machines that
labour. Similarly, a 2 inch screw requires 4.5 seconds of machine time,
of iron and 1.2 minutes of labour; a 2.5 inch screw requires 5 seconds of
machine the factory given that the total number of machines is 21 only.
screw requires
time, 30 grams of iron and 1.5 minutes of labour; and 3 inch 11. A holding company H has two subsidiaries X and
Y. The subsidiaries own some
minutes of labour. The cost
5 seconds of machine time, 38 grams of iron and 1.7 of the share capital of H. The proportionate ownership of the group
is
portion
iron costs150 per kg and a labour
of running the machine for an hour is 1,000, total expenditure
given below:
has to be paid R3 for an hour. Using matrix algebra, find the
Proportion of Share Capital Held in Company
for the Foundry to produce the targeted types of screws.
(Delhi Unit., B.Com. Hons., 2004 (C.C.)) Owner of Shares
H X
7. A company produces three products every day.
Their total production on a certain H 0.45 0.55
of their third product exceeds the
day is 45 tons. It is found that the production X 0 0.15
production of first product by 8 tons while the
total production of first and third 0.15
Determine the production
products is twice the production of second product. 0.20 0.15 0
level of each product, using Cramer's Rule. (Delhi Univ., B.A. Eco. (Hons.), 2001)
Outside Shareholders 0.65 0.40 0.30
8. The total cost C for a manufacturer producing two items, X and Y, is given below:
C p + qX + rY
If the separately earned profits of H, A and B are 74,50,000,
T2,00,000 respectively, find the total profits (i.e., separately earned profit plus
2,50,000 and
Data for three weeks is as follows: share in the profits of other companies) of each company by using matrix algebra.
Also verify that the sum of profits allocated to outside shareholders equals the
No. of Items Produced
Week Cost sum of the separately earned profits of all the companies.
12. Mr. X invested in the shares of H, P and Qequal to 20%, 30% and 20% of their
6950 40 10
respective paid up capitals. Company H holds 30% shares of P and 20% shares
2 6725 35 9 of Q: and Company P holds 20% shares of H and 30% shares of Q. Individually
7100 40 12 Company H earné a and company P earned a profit
profit of 765.000 of 27,000.
a result, Mr. X received a total dividend of 737,000 on his investment in
As shares
Find out the expected cost during 4th week, given that the number of
items of X of these companies. Find out the total profts (i.e., separately earned profit plus
and Y to be produced during 4th week are 50 and 18 respectively. share in the profits of other companies) of each company by applying techniques
(Delhi Univ., B.Com. Hons., 2003 (Bhutan Centre) Modified) of matrix algebra.
2./6 BUSINESS MATHEMATICS APPLICATION OF MATRICES TOBUSINESS AND ECONOMICS ./7
13. A Salesman has the following record of sales during three weeks of a partieular
17. A firm produces chairs, tables and cupboards, each requiring three types of raw
month in respect of items A. B and C, on which he earns sales commission at the materials-timber, nails and varnish. You are given below the units of different
rate of 2%, 3% and 1% respectively. The details of sales and commission are given raw materials required for producing one unit of each product.
below:
Product Timber (c. ft.)| Nails (dozens) Varnish (litres)
Sales in Units Total Commission (in Table 0.9 2.1 L.4
Week B C
A Chair 0.8 2.8 1.7
First 3000 4000 5000 26200
237 5.8 2.2
2000 2500 21500 Cupboard
Second 5000 If the firm uses Timber: 1585 c. ft., Nails: 3825 dozens and Varnish: 1825 litres,
Third 4000 6000 3000 31800
find out the number of units of Table, Chair and Cupboard that have been
Determine the selling prices of items A, B and C. produced, using matrix algebra.
X, Z, p, and p, respectively. The market demand
14. A manufacturer is engaged in the production of three products Yand which
are sold in three different markets A, B and C. The annual sales of these products
18. The prices per ton of wheat and rye
for wheat is given by x,
= 4 -
10p,
are
+
Tp, and for rye by x, 3 + 7p,
=
5p,. The -
in these markets are tabulated below: supply of wheat is related by the relation x, =
7+P) supply of rye by
- Pz and
x-27- P + 2p
Products (units in thousands)
Markets Write down the relevant simultaneous equations for determining the equilibrium
prices in matrix form.
.10 12 (i) Find the equilibrium prices and quantities using Cramer's Rule.
B 15 7 (Delhi Univ., B.A. Hons., Economics, 1990)
9 19. A producer uses three types of vehicles V,, V and V, to transport station wagons, large
cars and small cars. The following table gives the capacity of each type
of vehicle:
You are required to find out:
(a) Selling price of each product, if the total revenue (in thousands of rupees) from Vehicles
these markets are 1,152, 7 1,086 and R1,062 respectively.
thousands of rupees)
(6) the cost of producing these products, if the gross profit (in Station wagons
from these markets are 274, R231 and R 237 respectively. 3 7 12
Large cars
and T3, to transport three
15. A transport company uses three types of trucks, T, T, Small cars 6. 6 8
of each truck in tons with
types of material A, B and C. The carrying capacity below:
of materia is given Using the matrix method, determine the number of vehicles of each type needed
respect to each of the three types to supply 58 station wagons, 75 large cars and 62 small cars.
Truck
Type Material A Material B Material C (Delhi Univ., B.Com. Hons., 2012)
3
20. A firm produces three products P, P, and P, processed on 4 machines M,, M2
M, and M, M, can process 25 units of P, or 50 units of P2 or 75 units of P, per
2 hour. M, can process 50 units of any product per hour. M, can process 50 or 25
or 100 units per hour of the products P, P2 or Pg respectively. M, can
process
Using the matrix method, find 265 and
50 or 40 or 50 units per hour of the products P,, P2 or P, respectively. The
that a r e required to transport 210, processing hours available on machines M,, M,, M, and M, are 12, 12, 13 and 13
() the number of trucks of each type
185 tons of material types A, B and
C respectively. respectively. Using matrix notations, find how many units of three products can
has 18, 21 and be produced with the available time fully used? (Delhi Univ, B.Com. Hons., 2010)
which can be transported if company
(ii) the materials of each type
24 trucks of each type respectively. 21. A company earns before-tax profit of T1,00,000. It is committed to donating to the
goods: Red Cross of 10% of its after-tax profits. The Central Government levies corporate
16. Given the following demand and supply equations for three independent
2p, +2p, 2p,; Qp
=
16 2p, - P2 +
2pi Qps =
30P, +
2p-P tax of 50% of profts after deducting charitable donations and
donation to the
local taxes. The
D 45-
company must also pay local taxes of 10% of its profits less the
-
Qs-5 +2p; Qsa= -4 + 2pi Qss =-5 + Ps Red Cross. Formulate a set of equations and compute how much company pays
Rule. in corporate taxes, local taxes and as a donation to the Red Cross.
equilibrium prices using Cramer's
Calculate the 2002)
(Delhi Uniu., B.B.E.(Hons.) (Delhi Univ., Eco. Hons., 1997)
 BUSINESS MATHEMATICS
2.78

ANSWERS

residence: F1 124; Local market: 71065 Mall: T1018; Visit Mall

1. Shop near

2. 28, 24, R 40
per unit: 42, R32, F 38; Gross profits (in x 1000): F198, F236, F276
3. Selling prices
Cashier 480, Clerk 1250, Typist 70
4. () Office superintendent 20, Head clerk 240,
and Peon 790.
and Zonal Office 739,000.
(ii) Divisional Office 70.000., District Office 752,000
(ii) F 100,60,000|

5. 1.50,000; Additional Investment: Bond

A: 79000; Bond B: K8000

6. 3,99.004.80

7. 11 tons, 15 tons and 19 tons

5000, q 30 and 75
8.7850;p
=
= = r

{8,130 per week

9. Each constituent used: 260, 130, 220, 390; Total cost:

10. Automatic: 10, Semi-automatic: 7 and Manually operated: 4

11. H: 8,99,725; X: T4,52,123; Y: T4,47,764
12. H785,000; P: 751,034; Q: 723,448
13. A: 120; B: 7100; C: T140
cost of products per unit: F39, 725, F24
14. Selling prices per unit: T48, F30, 736;
288, B 330, C = 228
10; Material: A
= =

15. Trucks: T, =
15, T2 =
20, T, =

=
5, P, = 60 and p, = 75
16. Equilibrium prices: p,
and Cupboards: 400 units
17. Tables: 250, Chairs: 350

219 306
18. ( (ii) P 3P213 13 13
19. V: 2, V,: 3and V: 4
300
20. P: 100, P,: 200 and P:
taxes: R45,000 and Local taxes: R5,000.
21. Donation: 5,000, Corporate