Differential Calculus in Business Examples

This presentation explores the various business applications of differential

calculus, including revenue maximization, cost minimization, profit analysis,
marginal analysis, elasticity of demand, inventory management, marketing and
advertising, and risk management and finance. The presentation emphasizes the
significance of using data-driven decisions in the business context and includes
visual aids to illustrate concepts.
Introduction
Briefly introduce the concept of differential calculus and its importance in business decision-
making.
Revenue Maximization

01 Provide an example of a company adjusting its product price

based on the derivative of the revenue function.

02 Explain how differential calculus can be used to find the

optimal price point to maximize revenue.
Cost Minimization
Discuss how differential calculus helps in
determining the production level that minimizes costs.

● Present a case where a company uses

derivatives to optimize its production process
and minimize expenses.
Profit Analysis

Show how differential calculus can be employed to

find the production quantity that maximizes profit.

● Include a scenario where a business uses

derivatives to analyze different production
levels and their impact on profits.
Marginal Analysis

Explain the concept of marginal cost and marginal

revenue using derivatives.

● Illustrate how businesses make decisions by

comparing the rates of change of costs and
revenues.
Elasticity of Demand

Discuss how differential calculus is used to

calculate price elasticity of demand.

● Provides an understanding of how consumer

demand changes with a price increase or
decrease.
● Allows firms to effectively make pricing
decisions based on customer demand.
Price Optimization Based
on Elasticity
Provide an example of a company adjusting prices
based on the calculated elasticity to optimize
revenue.

● Company X calculates the elasticity of their

product and finds that demand is relatively
inelastic.
● Company X decides to increase the price of
their product, which results in a small
decrease in the quantity of product sold.
● Despite the decrease in quantity, the
increase in price results in higher overall
revenue, showing how adjusting prices
based on elasticity can optimize revenue.
Inventory Management

Describe how differential calculus aids in

inventory management by finding the optimal
reorder point.

● Present a case where a business uses

derivatives to determine when to replenish
inventory to balance costs.
Marketing and Advertising

01 Share a scenario where derivatives are used to assess the

impact of marketing spending on sales.

02 How differential calculus helps in analyzing the effectiveness

of advertising campaigns.
Risk Management and
Finance
Explain how differential calculus is used in
financial derivatives and risk management
strategies.

● Discuss applications like options pricing and

portfolio optimization.
Conclusion

Summarize the various ways differential calculus is

applied in the business context. Emphasize its
significance in making informed and data-driven
decisions. Remember to use visuals, graphs, and
diagrams to illustrate the concepts wherever
possible. You can use tools like Microsoft
PowerPoint to create your presentation,
incorporating the outlined content and your own
insights.
Thank you. Please feel free to ask any questions. 😄