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How do Accountants use calculus and statistics?

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  • 1 decade ago
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    Stats and calculus are used in stock optimisation:

    It costs money to have stock sitting in a warehouse; for example if a company assembled computers to sell, it has to buy the components (cases, wiring, circuit boards ec) to make the computers - i.e. is has to borrow to make the computers. If the computers sit in a warehouse waiting to be sold, then the company is paying interest on the money borrowed, but is receiving no income.

    This is why stock costs a company money. So where do the calculus and stats come in ?

    The company can work out a formula for the cost of stock held - it will depend on lots of things, but the bottom line is that these costs can be minimised - by using calculus.

    Statistical methods can be used to work out the probability of running out of stock of a particular item - eg. one of the components used in the manufacturing of the computers. After all, if the company has no disc drives to put into its computers, it can't make any of them and can't sell any - so running out of a component also costs money.

    Stock optimisation techniques use stats and calculus to minimise the overall stock holding costs, and to reduce the chance of running out of a particular stock item to an acceptable level.

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