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Least Cost Method

Step1: Select the cell having lowest unit cost in the entire table and allocate the minimum of supply or demand values in that cell.

Step2: Then eliminate the row or column in which supply or demand is exhausted. If both the supply and demand values are same, either of the row or column can be eliminated.

   In case, the smallest unit cost is not unique, then select the cell where maximum allocation can be made.

Step3: Repeat the process with next lowest unit cost and continue until the entire available supply at various sources and demand at various destinations is satisfied.

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