Procurement Management  ·  Level 6
Basic Mathematics And Statistics
Chapter 2: Apply statistical equations
📚 5 Topics
What you will be able to do

By the end of this chapter, you will be able to:

  • Determine linear equations correctly based on given objective functions.
  • Accurately find quadratic equations that match specific objective functions.
  • Formulate simultaneous equations correctly to solve multiple objectives at once.
  • Compute break-even analysis accurately to understand when costs and revenues balance.
  • Carry out differentiation and integration correctly to analyze changes and total values.
  • Formulate total revenue, total cost, and profit equations accurately according to organizational goals.

These skills will help you make smart, data-driven decisions that are essential for success in any technical or business trade.

Procurement management professionals frequently encounter mathematical problems involving quadratic and simultaneous equations when analyzing cost functions, optimizing resource allocation, or forecasting demand and supply relationships. Mastery of these equations allows for accurate decision-making in contract pricing, budget planning, and supplier negotiations. This chapter develops skills in solving quadratic equations by formula and factorization methods, as well as solving simultaneous equations using substitution, elimination, and matrix methods. Each technique is illustrated with practical examples relevant to procurement scenarios in Kenya.

2.2 Solving quadratic equations

Quadratic equations often arise in procurement when modeling costs that depend on quantities squared, such as bulk order discounts or penalty calculations. Being able to solve these equations accurately is essential for determining optimal order quantities or evaluating contract terms.

2.2.1 Formula method

A quadratic equation has the form \(ax^{2} + bx + c = 0\), where \(a eq 0\). The formula method, also called the quadratic formula, finds the roots (solutions) of the equation using:

$$x = \frac{-b \pm \sqrt{b^{2} - 4ac}}{2a}$$

This formula calculates the values of \(x\) where the quadratic expression equals zero.

Worked Examples

Example 1: A procurement officer models the cost savings \(C\) (in Ksh) on bulk buying as \(C = 2x^{2} - 8x + 6\), where \(x\) is the number of bulk units ordered. Find the order size \(x\) that results in zero savings.

Given: \(a=2\), \(b=-8\), \(c=6\)

$$x = \frac{-(-8) \pm \sqrt{(-8)^{2} - 4 \times 2 \times 6}}{2 \times 2}$$

$$x = \frac{8 \pm \sqrt{64 - 48}}{4}$$

$$x = \frac{8 \pm \sqrt{16}}{4}$$

$$x = \frac{8 \pm 4}{4}$$

For \(x_1\):

$$x_1 = \frac{8 + 4}{4} = \frac{12}{4} = 3$$

For \(x_2\):

$$x_2 = \frac{8 - 4}{4} = \frac{4}{4} = 1$$

Answer: The order sizes that yield zero savings are 1 and 3 units.

Example 2: A supplier’s penalty cost \(P\) (Ksh) for late delivery is modeled as \(P = x^{2} + 6x + 5\), where \(x\) is the days late. Find the days late when the penalty cost is zero.

Given: \(a=1\), \(b=6\), \(c=5\)

$$x = \frac{-6 \pm \sqrt{6^{2} - 4 \times 1 \times 5}}{2 \times 1}$$

$$x = \frac{-6 \pm \sqrt{36 - 20}}{2}$$

$$x = \frac{-6 \pm \sqrt{16}}{2}$$

$$x = \frac{-6 \pm 4}{2}$$

For \(x_1\):

$$x_1 = \frac{-6 + 4}{2} = \frac{-2}{2} = -1$$

For \(x_2\):

$$x_2 = \frac{-6 - 4}{2} = \frac{-10}{2} = -5$$

Answer: The penalty is zero at -1 and -5 days late, which are not practical. Hence, no days late yield zero penalty cost.

Example 3: The profit function \(P\) (Ksh) for a procurement batch is given by \(P = -3x^{2} + 12x - 9\), where \(x\) is the batch size in hundreds of units. Find the batch sizes where profit is zero.

Given: \(a=-3\), \(b=12\), \(c=-9\)

$$x = \frac{-12 \pm \sqrt{12^{2} - 4 \times (-3) \times (-9)}}{2 \times (-3)}$$

$$x = \frac{-12 \pm \sqrt{144 - 108}}{-6}$$

$$x = \frac{-12 \pm \sqrt{36}}{-6}$$

$$x = \frac{-12 \pm 6}{-6}$$

For \(x_1\):

$$x_1 = \frac{-12 + 6}{-6} = \frac{-6}{-6} = 1$$

For \(x_2\):

$$x_2 = \frac{-12 - 6}{-6} = \frac{-18}{-6} = 3$$

Answer: The profit is zero at batch sizes of 1 and 3 hundred units.

Example 4: The cost function in procurement is \(C = 4x^{2} - 20x + 25\). Determine the values of \(x\) where the cost is zero.

Given: \(a=4\), \(b=-20\), \(c=25\)

$$x = \frac{-(-20) \pm \sqrt{(-20)^{2} - 4 \times 4 \times 25}}{2 \times 4}$$

$$x = \frac{20 \pm \sqrt{400 - 400}}{8}$$

$$x = \frac{20 \pm 0}{8}$$

$$x = \frac{20}{8} = 2.5$$

Answer: The cost is zero at \(x = 2.5\) units (a single root).

2.2.2 Factorization

Factorization solves quadratic equations by expressing the quadratic as a product of two binomials equal to zero. This method is efficient when factors are integers or simple fractions.

The general form is:

$$ax^{2} + bx + c = (mx + n)(px + q) = 0$$

Solve by setting each factor equal to zero:

$$mx + n = 0 \quad \text{or} \quad px + q = 0$$

Worked Examples

Example 1: Solve \(x^{2} - 5x + 6 = 0\) by factorization.

Given: \(a=1\), \(b=-5\), \(c=6\)

Find two numbers multiplying to 6 and adding to -5: -2 and -3.

$$x^{2} - 5x + 6 = (x - 2)(x - 3) = 0$$

Set each factor to zero:

$$x - 2 = 0 \Rightarrow x = 2$$

$$x - 3 = 0 \Rightarrow x = 3$$

Answer: The solutions are \(x = 2\) and \(x = 3\).

Example 2: Solve \(2x^{2} + 7x + 3 = 0\) by factorization.

Given: \(a=2\), \(b=7\), \(c=3\)

Multiply \(a \times c = 6\). Find two numbers that multiply to 6 and add to 7: 6 and 1.

Rewrite middle term:

$$2x^{2} + 6x + x + 3 = 0$$

Group:

$$(2x^{2} + 6x) + (x + 3) = 0$$

Factor each group:

$$2x(x + 3) + 1(x + 3) = 0$$

Factor out common binomial:

$$(2x + 1)(x + 3) = 0$$

Set each factor to zero:

$$2x + 1 = 0 \Rightarrow x = -\frac{1}{2}$$

$$x + 3 = 0 \Rightarrow x = -3$$

Answer: The solutions are \(x = -\frac{1}{2}\) and \(x = -3\).

Example 3: Solve \(3x^{2} - 2x - 8 = 0\) by factorization.

Given: \(a=3\), \(b=-2\), \(c=-8\)

Calculate \(a \times c = -24\). Find two numbers that multiply to -24 and add to -2: 4 and -6.

Rewrite middle term:

$$3x^{2} + 4x - 6x - 8 = 0$$

Group:

$$(3x^{2} + 4x) - (6x + 8) = 0$$

Factor each group:

$$x(3x + 4) - 2(3x + 4) = 0$$

Factor out common binomial:

$$(x - 2)(3x + 4) = 0$$

Set each factor to zero:

$$x - 2 = 0 \Rightarrow x = 2$$

$$3x + 4 = 0 \Rightarrow x = -\frac{4}{3}$$

Answer: The solutions are \(x = 2\) and \(x = -\frac{4}{3}\).

Example 4: Solve \(x^{2} + 3x - 10 = 0\) by factorization.

Given: \(a = 1\), \(b = 3\), \(c = -10\)

Find two numbers multiplying to -10 and adding to 3: 5 and -2.

$$x^{2} + 3x - 10 = (x + 5)(x - 2) = 0$$

Set each factor to zero:

$$x + 5 = 0 \Rightarrow x = -5$$

$$x - 2 = 0 \Rightarrow x = 2$$

Answer: The solutions are \(x = -5\) and \(x = 2\).

Practice Questions

  1. Solve \(x^{2} - 7x + 12 = 0\) using the formula method. (5 marks)
  2. Solve \(3x^{2} - 11x + 10 = 0\) by factorization. (5 marks)
  3. A procurement cost function is \(4x^{2} - 12x + 9 = 0\). Find the values of \(x\) using the formula method. (6 marks)
  4. Solve \(2x^{2} + 5x - 3 = 0\) by factorization. (5 marks)
  5. Find the roots of \(x^{2} + 4x + 4 = 0\) using the formula method. (5 marks)
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🔒2.3 Simultaneous equations

Simultaneous equations model situations where two or more variables interact, such as balancing budgets and quantities in procurement contracts or analyzing supplier cost versus delivery time. Mastering various solution methods enables procurement managers to…

🔒2.4 Breakeven analysis

Breakeven analysis is crucial for procurement managers to determine the point at which total costs equal total revenue, indicating no profit or loss. This helps in deciding the minimum quantity of goods or services to procure or supply to cover costs and avoid…

🔒2.5 Calculus

Calculus equips procurement managers with tools to analyze cost functions, optimize procurement quantities, and forecast trends. Differentiation helps find rates of change such as marginal cost, while integration assists in calculating total costs or accumulat…

🔒2.6 Total revenue, total cost and profit equations formulation

In procurement management, understanding financial outcomes is critical for effective decision-making. Total revenue, total cost, and profit calculations provide essential quantitative insight into supplier contracts, project budgeting, and cost control. These…

Chapter Summary

This chapter covered essential mathematical techniques for solving quadratic equations using the formula method and factorization, enabling the determination of roots in various civil engineering problems. It explored methods for solving simultaneous equations, including substitution, elimination, and matrix approaches, which are vital for handling multiple variable relationships in practical scenarios. The concept of breakeven analysis was introduced to identify the point where costs and revenues balance, supporting effective financial decision-making. Calculus fundamentals were addressed through differentiation and integration, providing tools for analyzing rates of change and accumulated quantities. Finally, the chapter demonstrated the formulation of total revenue, total cost, and profit equations, linking mathematical principles to business and economic evaluations in engineering projects. Together, these topics equip students with a robust foundation in applying statistical and mathematical equations to solve real-world technical and financial challenges in the field.

Self-Assessment

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Written Assessment

  1. A procurement manager needs to solve the quadratic equation \(x^2 - 5x + 6 = 0\) to determine possible quantities of an item to order. Use the formula method to find the values of \(x\). (3 marks)

  2. Solve the quadratic equation \(2x^2 - 7x + 3 = 0\) by factorization to find the order quantities that satisfy the cost constraints. (4 marks)

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Chapter Examination Questions

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SECTION A (40 Marks) - Answer ALL Questions

  1. A procurement officer at a county government is solving the quadratic equation \(2x^2 - 5x - 3 = 0\) to determine the optimal number of suppliers to invite for a tender. Solve for \(x\) using the formula method. (4 marks)
  2. Factorize the quadratic expression \(x^2 + 7x + 10 = 0\) to find the values of \(x\) that minimize procurement costs. (4 marks)
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Am I competent?

At the start of this chapter we promised you would be able to:

  • Determine linear equations correctly based on given objective functions.
  • Accurately find quadratic equations that match specific objective functions.
  • Formulate simultaneous equations correctly to solve multiple objectives at once.
  • Compute break-even analysis accurately to understand when costs and revenues balance.
  • Carry out differentiation and integration correctly to analyze changes and total values.
  • Formulate total revenue, total cost, and profit equations accurately according to organizational goals.

Tick each one you can genuinely do.

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