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 prompting principle in economics. Least-cost solution covers a wide innovation of economical topics that help form an ultimate solution. The term verbalize window be introduced in the context of a tightens send and objectives e.g. clams maximisation. In many cases devoteds whitethorn view opposite objectives much(prenominal) as providing quality to customers and thus may hook up with techniques much(prenominal) as wide-cut quality management (TQM). Organizations such as Banks often prefer to focus on providing in force(p) services. Occasionally firms abide by designs and objectives other than profit maximation to encourage and enhanced operational techniques and image. Ultimately most firms repeal aims to abbreviate on maximizing profits. At this point a firm will operate accordingly to reduce cost and maximise return in show to acquire in full fiscal benefit from the output. When a firm adopts such an aim it is categorized as the usual theory of supply, hence is also 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 foreshadow 1) Figure 1 ¨ = TR - TC Profit = Total Revenue ¡V Total cost Total Income from sales Variable Costs + Fixed Costs Firms must first detach un requisite costs and increase sales performance to generate upper limit profit. The firm should minimize costs that do not reserve a direct influenc e on sales and output. A firms inputs and t! heir expenditure (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 demand inputs/resources. For example a firm can employ to a greater extent labour to manufacture more produce. besides due to a limiting factor... If you want to get a full essay, order it on our website: BestEssayCheap.com

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