Similarly, for producing a particular quantity of output, if the firm is to remain on IQ 2, then the least cost combination of inputs would be given by the point T 2, because this point is the point of tangency between IQ 2 and an ICL ie, L 2 M 2...
Least cost method LCM In this method, allocations are made on the basis of unit transportation costs The method is explained below Step 1 Select the cell with the least unit transportation cost and allocate as many units as possible to that cell...
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To minimise its cost for a given output 2 to maximise its output for given cost Thus the least cost combination of factors refers to a firm producing the largest volume of output from a given cost producing a given level of output with the minimum cost when the factors are combined in an optimum manner Assumption of least cost combinations 1...
Least Cost Method Definition The Least Cost Method is another method used to obtain the initial feasible solution for the transportation problem Here, the allocation begins with the cell which has the minimum cost The lower cost cells are chosen over the higher-cost cell with the objective to have the least cost of transportation...
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