Definition: The Minimum Cell Cost Method or Least Cost Method is another method used to

obtain the initial feasible solution for the transportation problem. Here, the allocation begins with
the cell which has the minimum cost. The lower cost cells are chosen over the higher-cost cell with
the objective to have the least cost of transportation.

There are three steps we need to consider in solving minimum cell cost method.

STEP 1: Find the cell with the smallest unit cost in transportation tableau. Allocate as much as
possible to the selected cell, and adjust the associated amount of supply and demand by subtracting
the allocate amount.

STEP 2: Cross out the row with 0 supply or demand. If both row and column have 0, arbitrarily
out one only.

STEP 3: If exactly one cell is left cross out the cell and stop. Otherwise, go to step 1

For example, using the previous problem for northwest method

Advantages

The Least Cost Method is considered to produce more optimal results than the North-west Corner
because it considers the shipping cost while making the allocation, whereas the North-West corner
method only considers the availability and supply requirement and allocation begin with the
extreme left corner, irrespective of the shipping cost.