4
. Gm ——_
APPLICATIONS OF MATRICES TO
BUSINESS AND ECONOMICS
2.1 INTRODUCTION
One of the major methods by which data are tabulated, stored and manipulated make:
use of matrices. Matrices have proved their usefulness in the analysis and decision
making processes in business, economics, sociology, chemistry-in fact, in any fielc
nt gaio
that has a quantitative side to it. 8.5 9210
} 2.2. MATRIX REPRESENTATION OF DATA _
A matrix provides a very convenient and toripact notation for representing data ii
many business and economic situations. THis is illustrated with a few examples :
1, Annual production relating to two branches and three types of items may b
represented in the following manner :
Branch tem A_ ema 'Bt\Wcltem C
1... [3000 6000 7000
a 4000 5500 8000. ™
Business Mathematics ond sy,
30
id three ty)
2, Vitamin content of two types of foods ant
represented in the following matrix:
pes of vitamins mz,
be
| amin C
| Food Vitamins Vitamin Vi
| 1 W 2
\) i lhe fi 9
3. Annual sale of three products in two markets may be represented as folloy,, 7
Product Market I Market I
A 6000 7000
B 8000 9000
c 5000 4000
4, Number of staff in the office may be represented by the matrix
3] Peon
5] Clerk
3| Typist
1) Head Clerk
1 Office Superintendent
5, Processing time of three products in two different production departments may
be represented by the matrix
Department
Product I I
P 4 3
Q 5 6
R 2 3
6. The unit cost of transportation of an item from e:
ach of thi i
cach of the four warehouses can be represented by the anit aa: eee ak *
Warehouse
Factory 4 WW wy,
IT 15 17 16 13
a 20 16 18 12
a 16 14 15 29 yr
ppptetions of Matrices to Business and Bconomics 7
Standard Deluxe
aw White [ 2 1 301
Rea | 3 4} mela) 06
rind his total sales for each model and colour for both months,
[Detht Untv. B.Com. (P) 2013 (Modified),
The total sales for each model and colour for both months can be obtained
by adding the two matrices A and
2 1), f3 1 5 2
nd [; IE 3] - [5 7]
le 2. The sales figure for two car dealers during January showed that Dealer
‘Asold 5 deluxe, 3 premium and 4 standard cars, while Dealer B sold 7 deluxe, 2
premium and 3 standard cars. Total sales over the 2-month period of January-February
revealed that Dealer A sold 8 deluxe, 7 premium and 6 standard cars. In the same 2-
month period, Dealer B sold 10 detuxe, 5 premium and 7 standard cars.
Write 2 x 3 matrices summarizing sales data for January and the 2-month period for
each dealer. Hence find the sales in February for each dealer.
Solution. The sales for the month of January can be represented by the matrix
Deluxe Premium Standard
Dealer A 5 3 4
*™ Dealers |7 2 3
Bach row of A.gives the number of each model sold by a given dealer. The sales for the
2-month period can be represented by the matrix
_
B-lio 5 7
‘The sales for the month of February is equal to the sales for the 2-month period of
January-February minus the sales for the month of January. Thus the sales in
February is
p-a-[2 7 6_[5 3 4]_[3 4 2
~ io 5 7] |7 2 3) [3 3 4]
24 SCALAR MULTIPLICATION — AN APPLICATION
The following example illustrates an application of scalar multiplication.
Example 3. In a certain city there are 30 colleges. Each college has 15 peons, 6
clerks, 2 cashiers, 1 typist and 1 section officer. Express the given information as a
column matrix. Using scalar multiplication, find the total number of posts of each
kind in all the colleges.
The number of posts of each kind in a college can be represented by the
‘matrix: Business Mathematics q J
dS,
32
My,
a
>
0
HEN Oo
icati ti
Using scalar multiplication, the to
al number of posts of each kind in all the Coley
a)
is:
15 450
6 180
30A = 30|°2 | =| 60 |.
1 30
i 30
F manufacturing plants located at Dg
Je 4, An automobile company has two manut "
tnd Pune. Itmanufactures scooters (S) and motorbikes (M) at each plant. Each vehi
is produced in three models A, Band C. The following two matrices give the numbe,
of vehicles (in thousands) of each model produced in the two plants during 1997.
A B Cc A B Cc
S[45 25 60 “#a\be 32 38
Ds ulae 28 20 “M|35 2233
(@ Write a matrix showing the total production for both plants in 1997.
(i Ifthe production is increased by 20% in Delhi plant and 10% in Pune plant,
write the matrix for total production for the following year.
: [Dethi Univ. B.Com. (P) 2009
Solution. (j The total production of each of three mo
dels at both the plants is giver
by
AB oc A Bc AaB oc
bop a Sits 25 60) | S/55 32 28] sfio0 57 88
Mis2 28, 20] miss. 22 33|7 ml 67 50. 53
(@ Ifthe production is incre:
ased by 20% in Delhi Plant, ioni
Delhi Peet ry 20% 1 Plant, then the new production i:
Dy = 1238 35" 60] [84 306711.-79
3228 20 38.4 33.6 24
Similarly, if the
roduction is i ‘i .
in Pune Plant E ction is increased by 10% in Pune plant, then the new productio 33
‘Abplications of Matrices to Business and Economics
Py = 11/95 32 28] _ [60.5 35.2 3]
w*""|35 22 33] 7 [38.5 24.2 36.3
hus the total production, after the increase in two plants, is given by
54 30 al [ses 35.2 eal lees 65.2 102]
+
py+Po [se 33.6 24]*|38.5 24.2 36.3] | 76.9 578 603
2.5 MULTIPLICATION OF MATRICES — APPLICATIONS
In the following we give several examples to illustrate applications of multiplication of
matrices. 4
Example 5. Three firms A, Band Csupplied 40, 35 and 25 truck loads of stones an‘
10, 5, 8 truck loads of sand respectively to a contractor. If the costs of stone and sand
are € 1200 and € 500 per truck load respectively, find the total amount paid by the
tractor to each of these firms, by using matrix method.
oe [Dethi Univ. B.Com. (P) 2013}
Solution. The amount of stone and sand supplied to a contractor by three firms A, B
and Ccan be represented by the matrix
Stone Sand
A[ 40 10
X= B/ 35 5
c(25 8
The costs (per truck load) of stone and sand can be represented by the column matrix
Stone [1200
¥= sana | 500
‘Thus the total amount paid by the contractor to each of these firms is given by the
matrix product
40 10 53,000] 4
-/35 5 a = |44,500| B
xY= 500
25 8 34,000] c
Hence the amount paid to firm A- %53,000; B- %44,500 and C- %34,000.
Example 6. A transport company uses 3 types of trucks 7,, T, and.T;, to transport 3
types of vehicles V,, V, and V,. The capacity of each truck in terms of 3 types of
vehicles is given below :
i)
Ones
wi ow
bon Zs ay
Business Mathematics ang 5
= vehicles of each type which hy
f which
Using matrix method, find the oon 30 trucks ofeach tyPe Fespectively,”°% 5
2 haas 10,2 f vehicles can be :
ee aa vis iin tend of 3typeso Tr
Solution. The capa
jatrix,
by the mi nny
wf1..2 3
vy)3 2 2
“le 2 2 be represent,
an en
ber of trucks of| each type used by the company ¢ Cd by,
The number of
column matrix
1,f10
y= 7|20
13|30
i sported is give;
The total number of vehicles of each type which can be transp. aiven by th
matrix product
1 2 3]f10] fi4o
xy= [3 2 2|/20] =/130
2 3 2][30} [140
Thus the number of 3 types of vehicles /;, /, and V, which can be transported are .
V,= 140, V,=130 and V,=140
isi i ‘levise document
Example 7. Two television companies TV, and TV,, both televis tary
programmes and variety programmes. TV; has two transmitting stations and TV, has
three transmitting stations, all stations transmit different Programmes. On an average
the TV, station broadcasts 1 hour of documentary and 3 hours of variety programmes
each day, whereas each 7V, station broadcasts:2 hours of documentary and 11
hours of variety programmes each day. The transmission of documentary and variety
Programmes costs approximately & 50 and ® 200 per hour respectively. Express, in
matrix form and hence evaluate :
{9 the daily cost of transmission from each TV, and each TV, station.
(@) the total number of hours which are devoted daily to documentary and to variety
Programmes by both companies.
(i) the total daily cost of transmission incurred by both companies,
Solution. ( The daily cos
[Dethi Univ. B.Com. (P) 2012]
the matrix multiplication :
t of transmission from each TV, and TV, station is given by
Doc. Var.
™ [ 2 | 50] Doc. _ 77,7650
™ 12 3/2} 1200] var = 77,| 400 LF
35
ppptetions of Matrices to Business and Economics
the daily transmission cost from TV, = © 650,
andthe daily transmission cost from TV, = © 400
variety
‘the total number of hours which are devoted daily to documentary a
@ programmes by both companies are given by the matrix multiplication ¢
Doc. Var.
TV, TV. rv, Doo Var.
[2 3] ( al rv, ~ [8 10.5]
‘Thus, 8 he
ours and 10.5 hours are devoted daily to documentary and to variety
programmes by both companies.
(a The total daily cost of transmission incurred by both companie
650
2 = [2500]
2 3] lea [2500]
‘Thus the total daily cost of transmission is 72500.
s is given by:
le 8. There are two Families A and B. There are 4 men, 6 women and 2
children in Family A and 2 men,
2 women, and 4 children in Family B. The
fecommended daily requirement for calories is : Man : 2400, Woman : 1900, child :
1800 and for proteins is: Man : 55 gram, Woman : 45 gram and Child 33 gram.
Represent the above information by matrices. Using matrix multiplication, calculate
the total requirements of calories and proteins for each of the two families.
Solution. The members of the two families can be represented by the 2 « 3 matrix:
M WC
Af4 6 2
F-pl2 2 4
and the recommended daily requirements of calories and proteins for each member
can be represented by the 3 x 2 matrix
Calories Proteins
M_ {2400 55
R= Ww |1900 45
c_ {1800 33.
The total requirements of calories and proteins for each of the two families is given by
the matrix multiplication :
2400 55
4 6 2 A[24600 556
FR= 1 5
[2 9 | 900 45 al |
4
1800 33 15800 332
Hence Famih is is
ly A requires 24,600 calories and 556 roteins Fami i
15,800 calories and 332 gm proteins. zn geil Peanty Breauires
op wep ld Business Mathematles: ana Stati
ty
36 dwiches and nweeta, Pp,
ce, sandwicl Ay
and Rbuy juice, buys 4, 6 and 19 y!" 0
Example 9. Three Cee 8 pieces of Seer note of juice conte,
eee ees aa pieces of each respective » gts @ 15, find the mone
He ays omnia 10 and a piece Oe ag matrix algebra.
i ndwi usin, 7
Eee ofthem on purchase of three ane [pein Unie. BCom: a 201
and sweets purchased by three perya
Ya
!
¥ pen,
Solution, The quantities of juice, sandwiche
can be represented by the matix
Pfio 5 8
Q- 0/4 6 10
R|6 7 9
matrix
The prices of these items can be represented by the
Juice [ 5
P= Sandwiches |10
Sweets |15.
‘The total sum of money spent by each of them for the purchase of three items is given
by
10.5 8){ 5]. [220
aPp=|4 6 10] |10} = |230
6 7 9]}[15} [235
Thus, the total sum of money spent by each one of them is:
P:%220, Q:%230 and R :%235
Example 10. Mr. Awent to a market to purchase 3 kg of sugar, 10 kg of wheat and
1 kg of salt. In a shop near to Mr. Aresidence, these commodities are priced at 8 20,
310 and ® 8 per kg whereas in the local market these commodities are priced at 15,
£8 and 6per kg respectively. Ifcost of travelling to local market is € 25, find the ne,
savings of Mr. A using matrix multiplication. [Dethi Univ. B.Com. (H) 2011]
Solution. The quantity of sugar, wheat and salt purchased. by Mr. Acan be represented
by the matrix
Sugar Wheat - Salt
Q-4[8 10
The prices of these commo:
\dities in th
represented by the matrix © nearby shop and the local market can be
Shop Local Market
Sugar | 20 15
P= Wheat | 10 8
Sat | 8
6 37
20 15
eF- [3 10 fio g = [168 131]
6
Cost of purchasing froma nearby shop
i =%168
and cost of purchasing from the local market =% 131
However, cost of travelling to local market =F 25°
7 Net savings of Mr. a = 168-131-259 =z19
Example 11. A student has 4 pla
eee ee te Frovulete he can eat lunch. The college canteen
coffee house charges & 50 for
a 4 x 3 matrix. The student wishes to buy 1 Dosa,
: drink. Find, using matrix algebra, the cost of lunch
at each place. Assuming that the student has no preference for any of the places,
decide where he should eat to spend the least amount of money.
Solution. The information in this problem may be expressed in a 4 x 3 matrix using
rows to represent the eating places and columns to represent the food purchases :
Dosa Frenchfries Soft drink
College canteen [40 13 15],
Coffee house | 50 12 14].
Fast food place || 40 14 15
Restaurant 60 15 0
His order can be represented by thé column matrix
Dosa 1
French fries |2
Soft drink {1
Using matrix multiplication, the cost of lunch at each place can be determined as
follows :
40 13 15 ’ %81] College canteen
50 12 14 % 88 | Coffee house
40. 14, 15 “| 83] Fast food place
60 18 of) [x90) Restaurant
Hence the student would spend the least amount of money by eating at College
Canteen. Business Mathematics ang —_
hich it sells in two
38 Band Cwl Matin
products A,
Exampi s three :
le 12. A firm produce’ : :
Annual sales in units are given as follows
Units Sold 3
: : a 2000
4000
rin co > Be
1
and %8 respectively and the cose,
S34 ane in each market by, Per
; itof A, Band © the total profit in Y uss
Ifthe prices per unit of , Band Care & 6;
Usin,
it are %3, <2 and % 4 respectively, [Delhi eee ®) 203 ¢
mat alg ined as follows :
pained fits per unit of A, Band Ccan be obtained a
tution . The profits
. 5 3 2
4|-/2] .]2
8 4 4
i i: duct
The total profit in each market is given by the matrix pro‘
2
8000 4000 2000 . [ex o00|
[Fa 3000 9000 4 56,000.
€ Sells in
three markets J, and II. Monthly sales and sale Prices are given as follow:
Market Items Sold Sale Price (in 2)
x y z Y 2
I 1000 1500 2000-209 3.00 4.00
1 2000-2800 3000 59 280 3.79
1 30003500 4000 -2.49 —-_— |
I the costs per item for three Products X, Y and Z are 1.80, 2.50 and & 3.40
Fespectively, find by matrix algebra his total Profit. [Dethi Univ. B.Com. (H) 2006
Solution. The total profit ig given by
2.00 ~ 1.89 2.50 ~ 1.80
[1000 1s00 2000] 300 ; 280 +[2000 2809 3000]} 2.80 - 2.50],
3.70 ~ 3.40
2.30 ~ 1.80
[$000 3500 4000]] 3.10 - 2.50
4.20 — 3.40 Applications of Matrices to Business and oonomicn id
0.20 0.70)
= [1000 1500 2000]] 0.50 +[2000 2800 3000]| 0.30 |+
0.60 : 0.30.
0.50
[3000 3500 4000]] 0.60
0.80
+= [2150] + [3140] + [6800] = (12,090),
Thus the total profit of the manufacturer is 12,090.
Beample 14. In acertain city there are 50 colleges and 400 schools. Each school and
college has 18 peons, 5 clerks and 1 cashier, Resp college, in addition, has 1 section
officer and 1 librarian. The monthly salary of each of them is as follows :
Peon- € 300, Clerk-® 500, Cashier- % 600, Section Officer- % 790 and Librarian-%900.
Using matrix notation, find (9 total number of Posts of each kind in schools and
colleges taken together, (i) the total monthly salary bill of all the schools and colleges
taken together. [Dethi Univ. B.Com. (#) 1983}
Solution. The number of schools and colleges can be represented by the matrix
School College
A= [400 50 ]
‘The number of posts of each kind in each School and college can be represented by
the matrix
Peon Clerk Cashier S.officer Librarian
Cotese| te 5 1 0 ‘|
B* cottege| 18 5 1 1 1
{9 The total number of posts of each kind in schools and colleges taken together
can be obtained by the matrix product
Peon Clerk Cashier S.officer Librarian
18 5 1 0 0] School
18 5 1 1 1 College
School College
[ 400 50 ]
Peon Clerk Cashier S.officer Librarian
= [8100 2250 450 50 50]
Thus there are 8100 Peons, 2250 clerks, 450 cashiers, 50 section officers and 50
librarians in all schools and colleges taken together.
(@ The total monthly salary bill of all the schools and colleges taken together is
given by Business Mathematios
\ ang
‘300 ‘
500
}| 600} = [39,05,000]
700
900,
40
[8100 2250 450 50 50
39;05,000:’
ducts P,, P, and P, requiring the ,.
irement of each Product ¢'p,
for Ou
Hence total imonthly salary bill = ©
Je 15. A firm produces three produc
aun My i, and’M;. The per unit requ
material is as follows : ay
MQ Mm M
B [2 3 1
~m|4 2 5
P3(20 0 4 2
Using matrix notations, find
(9 The total requirement of each material if the firm produces 100 units of,
product.
(i) The per unit cost of production of each product if the per unit costs Of materia
M,, M, and M, are ® 5, = 10 and 5 respectively, and lk
(ii The total cost of production if the firm produces 200 units of each product,
[Dethi Univ. B.Com. (P) 20 19
Solution. (j The total requirement of each material ifthe firm produces 100 units,
each product is given by the matrix product
A
ach
PPh Pg
M2 4 2)[100]% M, [800
Ma |3 4}|-100:| Py = «m3 | 900
M3 (1 2][100] P; Mg [800
an
Thus the firm requires 800 units of material M.,900 uni i
u 3 , 900 units of material M, and 800
‘units of material M, to produce 100 units of each product. °
(@ The per unit cost of production ofeach product is given by the matrix product
M, M. 2 Mg
Al2 3 ifs)m. pyas
Pol4 2 81110] My’ = p 65
3/2 2. 2
3 4 -2j[5]M, P| 60
‘Thus the per unit cost:
Tespectively, § of three products P,, Py and P, are % 45, % 65 and ¥ 60 ications of Matrices to Business, and Economics
Application
f h product is
{i The total cost of production if the firm produces 200 units of each PI
given by
41
45
[200 200 200]| 65] = [34,000]
60
‘qpus the total cost of production is ¥ 34,000.
Ie 16. The following matrix gives the proportionate mix of constituents used
jor the three fertilizers: /
Constituent
A B Cc D
I 0.5 0 0.5 o
Fertilizer = IT 0.2 0.3 ° 0.5
D 0.2 0.2 0.1 0.5
(j If-sales are 1000 tins ( of one kilogram) per week, 20% being fertilizer I, 30%
being fertilizer I and 50% being fertilizer II, how much of each constituent is
used ?
(i Ifthe cost of each constituent is 50 paise, 60 paise, 75 paise and 100 paise per
100 grams respectively, how much does one kilogram tin of each fertilizer cost ?
(i) What is the total cost per week ?
Solution. The proportionate mix of constituents used for three fertilizers can be
represented by the 4 x 3 matrix :
If mW
A/[05 0.2 0.2
B/O 03 0.2
Ci05 0 O01
DLO 05 05
The weekly sales of three fertilizers can be represented by the 3 x 1 matrix :
P=
0.2] I 200] I
8 = 1000/0.3| 7 =|300/7
0.5 | 500 |
(i The total quantity of each constituent used is given by the matrix product
If W@W
Aos 02 02 260] A
Blo 03 02/|2) 7
: 190| B
PB Glos 0 01|/90] 2 =
150] c
Plo os osjHOUm | ool oa AN
eee
t sented by 4 ‘
42 stuent (per kg) can be repre by Lexy,
+ (in) of each constituent ty
(ij The cost fin
matrix: Cost
Afs
B\6
C75
D\10 J
aes trix product :
Thus the cost of 1 kg tin ofeach fertilizer is given by the matrix p
s the
: A Bc D
5A
5 01 1{6.25
1fos 0 05 Ojl el, Ae
mjo2 03 0 05||, |= 2/7.
; 571° {7.95
m 02 02 0.1 05}! 5) 5
(i) The total cost of fertilizers, when 1000 tins (of one kilogram) are sold per wee ;,
given by
6.25
[200 300 500] 7.80| = [7565]
7.95
Thus the total cost per week is 27565.
Example 17. A baker makes bread, swe
8g, sugar, milk and yeast for his preparati
t patties and biscuits. He requires flour,
for making the bread, sweet patty and bi
ons. The requirement of these basic item,
iscuit is as follows :
‘Bread ‘Sweet Patty Biscui
Flour 250 g 50g 8g
99 ° 1/2 14
— 125g 100 g 25g
0.05 ii it
= tre 0.02 titre 0.01 litre
1/8 cake 0
Per kg and sugar fort 24 Per kg at controlled prices
18 and of yeast zg, i
299 sugar milk yeast
“ 0.125 0.05.-0.25
S On 0.02 0,
. 125
0.008 0,25 0.025 0.0; oO Applications of Matrices to Business and Economics as
The cost of the basic items can be represented by § x 1 column matrix :
flour [ 22
egg 2.50
B= sugar | 24
milk | ig
yeast | 8
‘The cost of making a bread, a sp
multiplication: ‘Sweet patty and a biscuit is given by the matrix
22
es — 0 0.125 0.05 0.25]]2.50| [11.4
05 05 0.1 0.02 0.125|| 24 | ={6.11 |.
9.008 0.25 0.025 0.01 0 |/18| [1.581
8
eee sadn et eres eeeas and cupboards, each requiring three
’ ial- er, nails and varnish. You are given below, the units of
different raw materials required for producing one unit of each product :
Product | Timber Nails Varnish
(c.f) ie (dozen) (litres)
Chair 0.7 a 7
Table 1 4 ce
Cupboard 3.2 6 a
Ifthe firm produces 300 units of each product, find the quantity of each raw material
using matrix algebra. [Delhi Univ. B.Com. (P) 2008}
Solution. The quantity of each raw material required if the firm produces 300 units
of each product is given by the matrix product :
Chair Table Cupboard
Timber [0.7 1 3.2 300] Chair Timber [1470]
Nails | 2 4 6 300| Table = Nails |3600
Varnish | 1 LS 2 300|Cupboard Varnish | 1350
‘Thus the firm requires 1470 c.ft. of timber, 3600 dozens of nails and 1350 litres of
varnish to produce 300 units of each product.
Example 19. A firm has two machines M, and M, costing? 45,000 and 7 30,000.
Each has 5 years life with scrap value nil. Find depreciation of each machine for
each year using matrix notation if () both are depreciated by sum of the year’s
digit method, (i first is depreciated by sum of the year’s digit method and second
by straight line method. Ny
Business Mathematics and
44
i ‘ca,
ir’s. digit method, th, ty
Solution. (i) According to the sum of the yea ig ;
olution, (i)
ive years would be ii : an, *
fi Id be in the ratio 52g thy,
fo for the first five years
lepreciation for each year
8/;2
: ively. Thus if we define ly
4 15 respectively. ,
4/15, 3/15, 2/15 and 1/
1 2 8.43 4 5
Total depreciation
45,000] Mr = [5/15 4/15 3/15 as15 1/15]
2 30,000} Ma
Then the annual depreciation of each machine for each Year is given by the
matrix product :
=°[ 48.000 [5/15 4/15 3/15 2/15 1/15]
30,000
1 2 3040 5
15,000 12,000 9000 6000 2000] M,
° lees 8000 6000 4000 2000
45,000 9 5/15 4/15 3/15 2/15 1/15
© 30,000] | 1/5 ys YS 1/5 1/5
= [#5000 12,000 9000 6000 3000] M,
~ [ 6000 6000 6000 6000 6000 M2
SOS Eres
100
fone ifn Ui98 Multiplication of a scalar times
ns if production is to double
pple te 10 dei citsaSoicahan
id 4 dozen of b,
apples 15 per dozen and Business Mathematics and
Stati
toy
48
ators : 3050
acitors ¢
. Transistors : 840, Registors * 7420, i £65,250; Market I: = 84,000
9. Marke
zo1, 106, €113
en
‘i 78
12,300 calories eee ne pore
10. Family X =
.s and 1
Family Y : 7900 calorie
11, College canteen
12, (9 Peons : 85, Clerks * 35,
pill for each sch
Head clerics + 25: Caretaker #5
ot: #8000 and FOF each college : € 16,100
(ij Monthly salary
(ig 240,500 ntants : 25, Head Clerks ;
13. (9 Peons : 625; Clerks : 250, Cashiers * 125, Accou! 8: 25
(i) %7,31,875
14, 6900, ©7875, ©7900 :
15, (9 M,:2000 M,:2600 M, 1 1200 (ess, 761, ee Bee
16. (9A:2100 B: 1400 c:1600 «tet v76, {ii £40,800
i 2500
a7. () M, [4000 3000 2000 1000) Mi [<000 pes 200 enn
‘M8000 -6000 4000 2000, ‘Mz [5000 000
(ii) M, [4000 3000 2000 1000 48. V; =270, Va = 355, Vy.
Mz|s000 5000 5000 5000.
CATIONS
2.6 SYSTEMS OF LINEAR EQUATIONS —APPLI
cuss common
d business an
methods of solving systems
d economics problems,
substitute goods are given by;
In this section we will review and dis
linear equations that result from applic
Example 20. The equilibrium conditions for the two $
5 p,- 2p, = 15
-p,+8p,7 16
find the equilibrium prices of the two competing products,
[Delhi Univ. B.Com. (P) 2013]
n equilibrium conditions can be expressed in the matrix formas:
E )-E3
Using matrix algebra,
Solution. The give
Now, |A| =38+0
Fi 7
Since |A| # 0, A‘! exists and the solution is given by X = AB. It can be readily
7 e readi
verified that
_af8.2
~ 38/1 5 |
49
ations of Matrices to Business and Economics
pplication’ ©
am. 1f8 27f15] 1 [152 rl
x -A"B= 38/1 5|[16|~ 38| 95 } 7 [25
ilibrium prices are :
us the equi
a pr 4 and p= 25
and B, find the
Je 21. Given the following equations for two related markets A
ilibrium conditions for each market and the price for each market :
eq
x, (A) = 82-3p, + Pz x, (A)=-5 + 15p,
x4 (B)= 92 + 2p,- 4Pp x, (B)=-6 + 32p,,
where x, and x; denote quantity demanded and quantity supplied respectively. Use
inatrix inversion method.
Solution. Equilibrium conditions are :
xq(A)= x,(A) and = x,(B)= x,(B)
82-3p,+ Pp= -5+ 15 p, and 92 + 2p,-4p,-- 6+ 32py
18p,- Py = 87
- 2p, + 36p,= 98
‘These can be written in the matrix form as
[> ele
-2- 36||pp 98.
A xXK=B8B
Now, |A| = 646 #0. Since |A| #0, A"? exists and the solution is given by X= A"! B.
Itcan be readily verified that
>
2
1 _|36 1)[87 5
= AIB= =~ =
x-4° sl's allel “(3
Hence the equilibrium prices are: Pa=5S and p,=3.
Example 22. Given the following National Income model :
C= a+bY(a>0,00,0 ie preity
Assuming D #0, the system possesses auniqu
D Do y= 23, where
ce Ea np
a 0 -b
D,= {4 1 -e =a-aetbd
i
o -1 1
1 a -b
p,=|0 da -€ =d+ea-bd
”
-1 0 2
1 0 4
Dj=|0 1 alratd
-1.-1 0
a-ae+bd
C= j-b-e°
put into three investments at the rates of
interest of 6%, 7% and 8% per annum respectively. The total annual income is % 358.
If the combined income from the first two investments is ¥ 70 more than the income
from the third, find the amount of each investment by using matrix algebra.
[Dethi Univ. B.Com. (H) 1989]
Solution. Let x, yand zrepresent the investments (in2) at the rates of interest of 6%,
7% and 8% per annum respectively. Then, according to the given information, we
have
Example 23. An amount of % 5,000 is
x+y+z = 5000 x+y+2z2 = 5000
0.06x + 0.07y + 0.082 = 358 © 6x +7y +82 = 35,800
0.06x + 0.07y = 0.082 +70 x + Ty - 8z = 7000 q FO ——E————
Applications of Matrices to Business ang Economics
51
‘The above system can be expressed in the matrix form as
: 1 fx 5000
Q 7 y¥| = | 35,800
7 -aile 7000
x B
The determinant of the coefficient matrix A is: |A| =-16
ince |A| #0, A* exists an sone Si :
eae ee d the solution is given by X = A” B, It can be easily
-112
melt Sienael
T6| 96 -14 ~2
0% nay 1
Hence the solution is ;
peed oa 15 1]{ 5000 -16,000 1000
KeATB=-76| 96 -14 ~9//35, 800) - -+ ~35,200| = |2200
oO -1 1}| 7000 - 28,800 1800
Thus x= 1000, y= 2200 and z= 1800,
Example 24. Mr. Xhas invested a part of his investment in 10% bond A and a part
in 15% bond B. His interest income during first year is 4000. Ifhe invests 20% more
in 10% bond A and 10% more in 15° ’ bond B, his income during second year increases
by € 500. Find his initial investments and the new investments in bonds A and B
using matrix method, [Dethi Univ. B.Com. (Hf) 1999]
Solution . Let his initial investments be & xand?
e i yin bond Aand bond Brespectively.
‘Then according to the given information, we have
0.10x + 0.15y= 4000 old)
Since he invests 20% more in bond A and 10% more in bond Bin the next ‘year, his
new investments are 1.20xand 1.10y. Thus again according to the given information,
we have
0.10 (1.202) + 0.15 (1.104) = 4500
or, 0.12x+0.165y= 4500 (i)
Now we'll solve Eqs. ( and (i! using matrix method. Expressed in the matrix from, we
obtain
0.10 0.15 x 4000
[ea Sea (| F (se00
A x B
Now |A| = 0.0165 - 0.0180 = - 0,0015+ 0. Hence the solution is given by X= A“IB. | 52
IL can be enuily verified that
Business Mathematios ang
By,
ny
Mo
‘
Ale
1 [0.165 ol
0.0015 |-0.12 0.10
4000)
4500,
1 F065 015
ATR eae
X-A"BH “GO OO15 [0.12 0.10
-15 et
“0.0015 esd * [20,000
vestments are %10,000 and 229 9,
hese values in 1.20xand 1,19), 9%
1, We
Thus x* 10,000, y= 20,000, That is, his initial in
in bond Aand bond Brespectively, Substituting
get his new investments as % 12,000 and € 22,000.
Example 25. A salesman has the following record of 80
three items A, B and Cwhich have different rates of com
es during three months f,
mission. '
i fal Commission Dy
Months Sales of Units Tot fin) ™n
A B c
January 90 100 20 ae
February 130 50 40 20
March 60 100 30 ae.
Find out the rates of commission on items A, Band C.
[Dethi Univ. B.Com. (P) 2008]
Solution. Let x, y and z be the rates of commission (in %) on items A, B and c
respectively. Then we have
90x + 100y + 20z= 800
130x+ 50y+ 402= 900
60x + 100y + 30z= 850
This can be put in the matrix form as
90 100 20][x] [800
130 50 40/|/y| = |900
60 100 30} z. 850
A X= B
‘The determinant of the coefficient matrix Ais
90 100 20 9 10 2 922
D=|a|=|130 50 40]= 1000/13 5 4) = 5000/13 1 4|~-175,000
60 100 30 6 10 3 6x4 b
Since D+ 0, the system has a unique solution. Using Cramer's rule,
given by
a i i.
the solution is Applications of Matrices to Business and Economics
53
D;
: D,
sath =p y= 32 and z= Po
where D,is the determinant obtai, . .
elements of the matrix B j= 1.9 50 70m Dby replacing the ith column of Dby the
‘Thus,
800 100 20 nate
900 50 40] 1000/00 5 4
850 100 3
= EO 85 10 3] _ -350,000 _
-1,75,000 75,000 —
90 800 20 9 80 2
130 900 40] 1000/13 90 4
60 850 30 Brovag 1:3
ye a =— 16853] a
~1,75,000 =1,75,000 ~ ”
9 10 80
1000/13 5 90
ae . 610 85| _ ~1,92,5000
2 ~1,75,000 = 2175,000
Hence the solution is x= 2, y=4 and z= 11,
Example 26. A transport company uses 3 types of trucks 7,, 7, and Ty, to transport
3 types of vehicles V,, V, and V,. The capacity of each truck in terms of 3 types of
vehicles is given below :
ones
vv os
ne ns
Using matrix method, find the number of trucks of each type required to transport
85, 105 and 110 vehicles of V,, V, and V, types respectively.
[Dethi Univ. B.Com. (P) 2010}
Solution. Let x, yand zdenote the number of trucks required of each type. Then we
have
x+2y +3z = 85
3x + 2y +22 = 105
2x + 3y +22 = 110
The system in the matrix form is : F :.
54 Business Mathematics and Statin,
1.2 3) [x 85
3 2 2} /y| =/105
23 2|{z| [110
x 8B
Now |A| = 1(4- 6) - 2(6- 4) + 3(9- 4) =-2-4+ 15-9 ap. ttean be easily Verieg
Since |A| #0, A exists and the solution is given by X= A” B-
that
“2 5 -2
atei|2-4 7
Ba 1 -4
Hence the solution is :
-2 5 -2) [85 135] [18
i 05| = 2/180 = | 20
K=atB= 5 )-2 -4 7| |105/=5 a
5 1 -4] [110 90
eee ling two products
Example 27. The total sales (5) in thousands of rupees of a firm sel ing two, P 7
Xand Yis given by the relationship : S= a+ bX + cY. Data for the first three months
is given as under :
Months Total Sales x ~~ ¥
1 12 2 3
2 13 6 2
3 15 5 3
Using determinant method, determine the sales in the next month when it sells 4
units of Xand 5 units of Y.
Solution. From the given data, we have
a+ 2b+3c=12
a+ 6b+20=13
a+5b+3c=15 .
We solve the above system for a, band cusing determ:
of the coefficient matrix is : S
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