Linear Equations in Business

706 WordsJan 9, 20183 Pages
Linear Equations in Business Decision making in business is of critical importance since making the wrong decision as it relates to purchasing or manufacturing can cost millions of dollars in revenue. Businesses engage empirical methods to collect and analyze data that allows them to make more accurate decisions. Linear equations allow individuals to make decisions about unknown quantities from known quantities. In this sense linear equations are predictive and allow the business to project changes in one variable or quantity based on changes in another. A linear equation is very similar in many respects to other equations in that it is comprised of two different expressions that are equivalent to each other. Linear equations differ for other equations in the following respects; no variable in the equation has a power that is greater than one (Math Steps 1999). Additionally the pairs of variables in the equation when plotted on a graph will produce a straight line. Linear equations are straight line equations; their usefulness comes from that essential property (Aron, Coups, & Aron, 2011). In business linear equations often provide the tools for price determination, plan formation and the identification of critical values that allows the individual to make crucial decisions. The price of a good or commodity is often linked to other variables that are market based. Linear equations can be used to determine the price under specific conditions. If the price for oil was
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