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Advantage of Least Cost Method
a. This method provides accurate solution as transportation cost is consider while making allocation.
b. It is very simple and easy to calculate optimum solution under this method.
Disadvantage of Least Cost Method
a. This method does not follow steps by step rule for obtaining optimal solution ,
b. This method is based on the selection through personnel observation when three is a tie in the minimum cost it does not follow any systematic rule.
Determine the formula of the Economic Order Quantity. The formula for Economic Order Quantity (EOQ): EOQ = √((2x C O x D)/(C H ) Here D = Annual demand (units)
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