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3 Important steps to implement Least Cost Method
Least cost method is the procedure of determining the optimality of an initial feasible solution when it comes to transportation costs.
3 Steps in which Least Cost Method can be applied are:
- Step 1.
The cell with lowest unit cost in the entire mathematical table is to be selected, and then minimum supply or demand values in that cell are to be allocated.
- Step 2.
The column or row in which demand or supply has been exhausted should be eliminated. If values of demand and supply are same, either column or row, anyone can be eliminated. Select a cell in which maximum allocation can be made if the smallest unit cost is not unique.
- Step 3.
The process is to be repeated until the entire supply from various sources and demand at various points is satisfied.
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