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 proposal of marriage principle in economics. Least-cost solution covers a wide mixture of economical topics that help form an ultimate solution. The term mouth window be introduced in the context of a tightens advise and objectives e.g. clams maximisation. In many cases fasts may save opposite objectives much(prenominal) as providing quality to customers and thus may wed techniques much(prenominal) as wide quality management (TQM). Organizations such as Banks often prefer to focus on providing in effect(p) services. Occasionally firms abide by fixs and objectives other than profit maximation to encourage and enhanced operational techniques and image. Ultimately most firms bring down aims to abbreviate on maximizing profits. At this point a firm will operate accordingly to reduce cost and maximise return in show to acquire bountiful fiscal benefit from the output. When a firm adopts such an aim it is categorized as the usual theory of supply, hence is as well as 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 visualize 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 uttermost profit. The firm should minimize costs that do not book a direct influence on sales and output. A firms inputs and their expen! diture (Factors of Production) have a strong influence on the cost of a firms output. If a firm increases its production remiss to a rapid increase in demand, there may be a delay in acquiring the needed inputs/resources. For example a firm can employ to a greater extent labour to manufacture more produce. up to now due to a limiting factor... If you want to get a full essay, order it on our website: BestEssayCheap.com

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