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Break Even Analysis

The document discusses different types of functions used in business and economics, including linear, quadratic, polynomial, rational, exponential and logarithmic functions. It provides examples of linear functions and how to find the slope and graph a linear function. It also shows how to model a supply and demand problem using linear equations and find the equilibrium point by graphing the supply and demand lines.

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gun attaphan
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130 views16 pages

Break Even Analysis

The document discusses different types of functions used in business and economics, including linear, quadratic, polynomial, rational, exponential and logarithmic functions. It provides examples of linear functions and how to find the slope and graph a linear function. It also shows how to model a supply and demand problem using linear equations and find the equilibrium point by graphing the supply and demand lines.

Uploaded by

gun attaphan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Let us Pray

Almighty Father in heaven, we praise and


glorify You for giving us the chance to be with
You once again.
Calling your Mighty name asking for
forgiveness for we are sinners, though we are
not worthy to beg for it.
Today is another present from Your love and
we thank you for this beautiful gift of family
and friends.
Serving You in the face of others is all what
we ask, in able for me to be worthy of Your
love.
OME Lec.3:
Operation Research 2

Break Even Analysis


Types of
Functions and their Graphs
Types of Functions and Graphs
Here are the commonly used types of
functions which will be introduced in
this module, together with their
properties and applications in business
and economics.
A. Linear Functions
B. Quadratic Functions
C. Polynomial and Rational Functions
D. Exponential Functions
E. Logarithmic Functions
F. Piecewise-defined Function
LINEAR FUNCTIONS
 In many practical situations, the rate at which
one quantity changes with respect to another is
constant.
Example:
A manufacturer’s total cost consist of a
fixed overhead of $200 plus production
costs of $50 per unit. Express the total
cost as a function of the number of units
produced and draw the graph.
Solution:  
Let:
C(x) be the function
x be the unit of a product
fixed overhead = $200
production costs = $50 per unit

C(x) = 200 + 50x


Table of values
x 0 1 2 3 4 5
C(x) 200 250 300 350 400 450
 Graph:
x 0 1 2 3 4 5
C(x) 200 250 300 350 400 450

C(x)
500

400

300

200

100

x
1 2 3 4
Properties of a Linear Function
• The graph of a linear function
  is a straight line.
• The equation of a linear function can be written in
the form:
  and
Where:
is the slope (rate of rise or drop) and is a
constant.

Slope of a line. The slope of any line passing


through the points and is given by the formula: 
Practical Application

Since the beginning of the year, the


price of a bottle soda at a local discount
supermarket has been rising at a
constant rate of 2 cents per month. By
November first, the price had reached
$1.56 per bottle. Express the price of
soda as a function of time and
determine the price at the beginning of
the year.
Solution:
Using ;  
Where:
m = 0.02 → 2 cents
= 10 → November 1st
= 1.56
y – dependent variable
x – independent variable

On November 1st, x = 10
Thus; y – 1.56 = 0.02(x – 10)
y = 0.02x – 0.2 + 1.56
y = p(x) = 0.02x + 1.36
p(0) = 0.02(0) + 1.36
p(0) = 1.36

 Problem
  involving Supply and Demand
 At a price of $9.00 per box of oranges, the supply
is 320,000 boxes and the demand is 200,000
boxes. At a price of $8.50 per box, the supply is
270,000 boxes and the demand is 300,000 boxes.
 A. Find a price-supply equation of the form

where is the price in dollars and


is the corresponding supply in thousands of
boxes.
 B. Find a price-demand equation of the form
where is the price in dollars and
is the corresponding demand in thousands
of boxes
 C. Graph the price-supply and price-demand
equations in the same coordinate system and
find their point of intersection.
Solution:
 
 Let y = p – dependent variable
 x = in thousands Supply – Demand
 For Supply function:

→ supply price function


For Demand function:
 

→ demand price function


Break Even Point
→  supply price function
→ demand price function

x = 280
Thus: y = – 0.005(280) + 10
y = 8.6
The Equilibrium point is at (280, 8.6)
Graph:
Demand:  
Supply:

p(x)

9.00

8.50

8.00

x
200 240 280 320
The only door to escape
ignorance is the door of
curiousity…
Sir Anre
END OF SLIDES
Thank You
And
Good Day…

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