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

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.