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Vogel Approximation Methods ( VAM): like the least methods the Vogel Approximation Methods( VAM) also consider the shipping costs. but in a relative sense when making allocations.
Total Cost : 4x15+1x35+3x20+8x20+4x+60x= Rs. 555
Suppose the firm in this example considers a second product that has a unit profit of $5 and requires 2 hours for each unit produced. Assume total production capacity remains 40. U
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