What do you understand by the term least-cost solution and in what sense is it a "solution"?

The term least-cost solution does non describe one particular proposition principle in economics. Least-cost solution covers a wide transmutation of economical topics that help form an ultimate solution. The term bay laurel window be introduced in the context of a tightens send and objectives e.g. clams maximisation. In many cases tightens may waste opposite objectives much(prenominal) as providing quality to customers and thus may splice techniques such as tot quality management (TQM). Organizations such as Banks often prefer to focus on providing efficient services. Occasionally firms abide by bring forths and objectives other than profit maximisation to encourage and enhanced operational techniques and image. Ultimately most firms vacate aims to abbreviate on maximizing profits. At this point a firm will operate accordingly to reduce be and maximise return in show to acquire beneficial fiscal benefit from the output. When a firm adopts such an aim it i s categorized as the usual theory of supply, hence is excessively cognize as theory of the firm. A firm calculates its profits by subtracting the total costs of production from the total revenue beard from the gross sales of that produced amount.

(See purpose 1) Figure 1 ¨ = TR - TC Profit = Total Revenue ¡V Total cost Total Income from sales Variable Costs + Fixed Costs Firms must first detach un undeniable costs and increase sales performance to generate supreme profit. The firm should minimize costs that do not boast a direct influence on sales and o utput. A firms inputs and their expenditure! (Factors of Production) have a strong influence on the cost of a firms output. If a firm increases its production due to a rapid increase in demand, there may be a delay in acquiring the requirement inputs/resources. For example a firm can employ to a greater extent labour to manufacture more produce. unless due to a limiting factor... If you want to get a full essay, order it on our website: BestEssayCheap.com

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