VOGELS

APPROXIMATIO
N METHOD

OPPORTUNITY COST
COST OF OPPORTUNITIES THAT
ARE SACRIFICED IN ORDER TO
TAKE A CERTAIN ACTION.
O.C. =SECOND LOWEST COST-LOWEST
COST

TRANSPORTATION PROBLEM
A

SUPPL
Y

150

10

12

10

200

14

50

DEMAN
D

100

80

220

400

SUPPL
Y

150

10

12

10

200

14

50

3*

DEMAND

100

80

220

400

O.C.

O.C.

1
2
3

10

12

10

14

50

DEMAND

100

80-50= 30

220

O.C.

SUPPLY

O.C.

150

200

50-50=0

3*

400-50=350

1
2
3

10

12

10

14

50

DEMAND

100

30

220

O.C.

7*

SUPPLY

O.C.

150

200

350

1
2
3

SUPPLY

O.C.

15030=120

200

30
10

12

10

14

50

DEMAND

100

30-30=0

220

O.C.

7*

350-30=320

1
2
3

30
10

12

10

14

50

DEMAND

100

O.C.

3*

220
1

SUPPLY

O.C.

120

200

320

1
2
3

SUPPLY

O.C.

100

30

120100=20

10

12

10

200

14

50

DEMAND

100100=0

O.C.

3*

220
1

320100=220

1
2
3

100

30

20

10

12

10
200

14

50

DEMAND

220

O.C.

1*

SUPPLY

O.C.

20

200

220

1
2
3

100

30

20

10

12

10
200

14

50

DEMAND

220-220 =
0

O.C.

1*

SUPPLY

O.C.

20-20=0

200200=0

220220=0

1
2
3

100

30

20

10

12

10
200

14

50

DEMAND

O.C.

1*

SUPPLY

O.C.

3
DEMAND

100

30

20

10

12

10
200

14

50
100

800

220

SUPPLY
150

200

200
200

OPTIMIZATION
STEPPING STONE METHOD
MODIFIED DISTRIBUTION METHOD

STEPPING STONE
THE
EPSILON
COMPUTERS
COMPANY
SELLS
DESKTOP
COMPUTERS TO UNIVERSITIES WITHIN THE UNIVERSITY BELT,
AND SHIP THEM FROM THREE DISTRIBUTION WAREHOUSES. THE
FIRM IS ABLE TO SUPPLY THE FOLLOWING NUMBERS OF
DESKTOP COMPUTERS TO THE UNIVERSITIES BY THE BEGINNING
OF THE ACADEMIC YEAR.
UNIVERSITIES HAVE ORDERED DESKTOP COMPUTERS THAT
MUST BE DELIVERED AND INSTALLED BY THE BEGINNING OF THE
ACADEMIC YEAR.

TABLES
Distribution
Warehouses

Supply

University/Colleg
e

Demand

Sta. Mesa

150

CEU

100

Taft Avenue

200

FEU

80

Divisoria

50

UE

220

TOTAL

400

TOTAL

400