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Advantage of North West Corner Method:
a. This methods is very effective as it provide step by step solution.b. It is very simple to obtain optimum solution through this method.
Disadvantage of North West Corner Methods
a. This method does not take into consider the important factor viz, cost which is sought to be minimized.b. NW corner rule take more time in obtaining optimal solution.
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It allocates costs based on the price elasticity of demand. Yet higher the elasticity (elastic), the lower the charge of fixed costs when allocated amongst products.
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