Introduction

This kind of assignment targets the cost features of the Dutch Railways. Through this tutorial will be an estimated expense function developed for the Nederlandse Spoorwegen (NS). This kind of cost function (expressed in Dutch Guilders) is based on the time of 12 months 1951 right up until Year 1993. This due to certain advancements that managed to get more difficult to come to a good procedure of a cost function. Based on the cost function, developed through this tutorial, you will have an answer provided on the issue whether is it efficient to permit competition on the tracks. Initial we will define a cost function related to the NATURSEKT. Then we all will identify the important variables. After defining the cost function, the significance of the cost function will be discussed. When the significance is known, the ideal data works extremely well and the dataset can be interpreted. This meaning is useful to create an appropriate appraisal of the cost function related to the provided data. After examining the data, you will see a cost function (Cobb-Douglas method) developed based on regression of the dataset. Finally, this guide will be came to the conclusion. Cost function analysis is extremely helpful in offering the appropriate details needed to generate strategical decisions for the company. From the cost function we could decide perhaps the firm will produce multiple results or it is cheaper to offer the same output by separate businesses. Of course the value of this kind of decision boosts when we consider the environment where the firm will certainly operate. By way of example if the firm will be privatized or regulated. Cost function analysis in the railway sector can be done in various ways. One can possibly use geradlinig and Cobb-Douglas type price functions or even more flexible efficient functions and even efficiency analysis. Theoretical Qualifications

A cost function is a function that sets out the cost of the capital goods and also other production elements against the received output from the costs created for production. The second...