Transportation Problems: Least Cost Method

Transportation Problem

• The transportation problem involves finding the minimum cost of transportation.
• The problem is solved using two methods: Least Cost Method and Vogel's Approximation Method (VAM).

Least Cost Method

• Balance the problem in Step 1.
• Select the lowest cost from the entire matrix and allocate the minimum of supply or demand in Step 2.
• Remove the row or column whose supply or demand is fulfilled and prepare a new matrix in Step 3.
• Repeat the procedure until all allocations are over in Step 4.
• Calculate the transportation cost after all allocations are over in Step 5.

Vogel's Approximation Method (VAM)

• VAM is an iterative procedure used to calculate the initial feasible solution to a transportation problem.
• The goal of VAM is to minimize the total cost.
• The method involves finding the penalties for each available row and column by considering the least and second least cost.
• VAM is used to calculate the initial basic feasible solution to a transportation problem.
• The method is iterative, finding penalties for each available row and column in each step.