Application of Logarithmic Function in Business

The logarithmic function is applicable when modeling business applications. This is because it offers a constant mathematical relationship, constant constraints themes which are set by the administrator for every group of significant factors. Thus, the equation is controlled by the situational constraints.  The use of logarithmic function in modeling business applications can be easily established. This is because its limits on every factor can be changed easily according to circumstances. Logarithm function is used since non-fixed numerical values affect sales either positively or inversely. The logarithm function uses the F value which acts as the function’s upper limit (Richard, 1986). The simulation administrator can alter the F value depending on the variable being examined. By making use of   the upper limit function, one is able to control the effect of a variable thus shifting the multiplier function. The formula for the necessary equation is.

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This equation is applied for non-fixed numerical values affecting the total sales of a company inversely (Richard, 1986). For example an increase or decrease in selling price when demand is constant. The program administrator can change the F value to suit the effect of the sales that a company wants. For example, if a company wants to have drastic change in sales it can choose a bigger F value. If it wants a smaller change in sales, a lower F value is chosen.  0.06875 is used in the formulae to guarantee that the denominator is greater than zero thus avoiding having undefined equation (Chiesel, 1986). To cancel its effect on the total sales equation, 0.06875 is used in the numerator as well as in the denominator. I think it is advisable to use logarithmic function in business applications because; one can manipulate the F value to have desired changes in sales. For example if an increase in selling price decreases the no of products sold, the company can get a compensation for  the decrease by choosing a desirable F value.

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