BUSINESS MANAGEMENT JOURNAL

The famous method to determine and solve transportation problem is the transportation model and the assignment model. We see how to develop an initial solution to the transportation problem with VAM (Vogel’s Approximation Method) and MODI (Modified Distribution) and Northwest Corner rule and the Stepping-Stone method. VAM is not quite as simple as the Northwest Corner approach, but it facilitates a very good initial solution, as a matter of fact, one that is often the optimal solution. The Assignment method, which is simple and faster to solve the transportation problem by reducing the numbers (cost) in the table/tableau until a series of zeros is found, or zero opportunity costs, which means that we will reach the optimal cost allocations. Once we have reached the optimal cost allocations, we then allocate each sources or supply according to some points of demand (destinations). Assignment Method is a specialized form of optimization linear programming model that attempts to assign limited capacity to various demand points in a way that minimizes costs. The special cases of transportation problem included degeneracy (a condition that occurs when the number of occupied squares in any solution is less than the number of rows plus the number of columns minus 1 in a transportation table), unbalanced problems, and multiple optimal solutions. At this opportunity, we would like to demonstrate the multiple optimal solutions. We will see how the Assignment method may be viewed as a special case of solving the transportation problem.

Keywords : Assignment method, VAM and MODI, Northwest Corner and Stepping-Stone.