Estimation of Cost Minimization of Garments Sector by Cobb-Douglas Production Function: Bangladesh Perspective

Mohajan, Haradhan (2021): Estimation of Cost Minimization of Garments Sector by Cobb-Douglas Production Function: Bangladesh Perspective. Published in: Annals of Spiru Haret University Economic Series , Vol. 20, No. 2 (30 June 2021): pp. 267-299.

Abstract

The Cobb-Douglas production function in the field of economics has a long history. In mathematical economics, it is used to find the functional relationship between the economic inputs and potential outputs. This study applies the Cobb-Douglas production function to predict the cost minimization policies of a running garments industry of Bangladesh. In the study the effects of the variation rate of capital, labor and other inputs with returns to scale in the garments industry of Bangladesh are examined. In multivariable calculus, the method of Lagrange multiplier is a very useful and powerful technique. In this study interpretation of Lagrange multiplier is given to predict the cost minimization policy using Cobb-Douglas production function. An attempt has been taken here to show the production of garments in minimum cost by using statistical analysis.

• Item Type: MPRA Paper
• Language: English
• Keywords: Production function, Cobb-Douglas model, cost minimization, returns to scale
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling; C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C61 - Optimization Techniques ; Programming Models ; Dynamic Analysis

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