The Stepping Stone Method is an important method in the field of optimization, particularly used

to find the most efficient solution to transportation problems. Its use often begins with a phase that
employs Vogel's Approximation Method (VAM) to develop a basic viable solution. The Stepping Stone
Method's ultimate goal is to improve on this early answer by a thorough process of evaluating,
appraising, and strategically altering the distribution of commodities along multiple routes. Here's a
step-by-step explanation of how to use the Stepping Stone Method with VAM:

Step 1: Set up the Initial Feasible Solution

Start by setting up the initial feasible solution, which is typically obtained using the North-West Corner
Method, Minimum Cost Method, or VAM .In this problem we are going to use the VAM method with
the problem:

A company needs to transport its products from three suppliers to three distribution center. The
transportation costs per unit (in pesos) from each supplier to each distribution center are given in the
following table:

To A B C Supply
From
1 8 10 12 100

2 6 9 11 300

3 12 7 14 150

Demand 120 180 250

With the given data, we are going to calculate the opportunity Cost Matrix. The opportunity cost matrix
is calculated by finding the difference between the two lowest costs in each row and each column of the
cost matrix.

Row/Column 2nd Lowest Lowest Cost Opportunity

Cost Cost
1 10 8 2
Largest Difference
2 9 6 3
3 12 7 5
A 8 6 2
B 9 7 2
C 12 11 1
Allocate 150 units in cell x3B that contains the lowest cost in column B and cross out column B as well
as row 3 which has the same amount of units. Compute for the next opportunity cost.

To A B C Supply
From
1 8 10 12 100

2 6 9 11 300

3 12 7 14 150
150
Demand 120 180 30 250

Again with the given data, we are going to calculate the opportunity Cost Matrix.

Row/Column 2nd Lowest Lowest Cost Opportunity

Cost Cost Largest Difference
1 10 8 2
2 9 6 3
A 8 6 2
B 10 9 1
C 12 11 1

Allocate 120 units in cell x2A that contains the lowest cost in row 2 and cross out column A. Compute
for the next opportunity cost.

To A B C Supply
From
1 8 10 12 100

2 6 9 11 300 180
120
3 12 7 14 150
150
Demand 120 180 30 250 180

In this situation, there are two largest difference in this case we are going choose the row/column with
the lowest cost which is row 1.

Has the lowest cost

Row/Column 2nd Lowest Lowest Cost Opportunity
Cost Cost
1 10 8 2
2 11 9 2
B 10 9 1
C 12 11 1

Allocate 30 units in cell x1B that contains the lowest cost in row 1 and cross out column B.

To A B C Supply
From
1 8 10 12 100 70
30
2 6 9 11 300 180
120
3 12 7 14 150
150
Demand 120 180 30 250

As column C is the only column that has an opportunity cost, allocate 180 units in cell x2C which
contains the lowest cost and cross out row 2. Lastly, Allocate 70 units in cell x1C then cross out row 1
and column C.

To A B C Supply
From
1 8 10 12 100 70
30 70
2 6 9 11 300 180
120 180
3 12 7 14 150
150
Demand 120 180 30 250 70

Step 2: Calculate the transportation Cost

Now we can calculate the transportation cost:

Source – Destination Quantity Shipped x Unit Total Cost
Cost
X1B 30 x 10 300

X1C 70 x 12 840

X2A 120 x 6 720

X2C 180 x 11 1,980

X3B 150 x 7 1,050

Total Transportation P4,890
Cost

Step 3: Use the Stepping Stone Method to Find a New Feasible Solution

The Stepping Stone Method is used to repeatedly investigate and develop new viable
transportation alternatives, assuring optimal resource allocation while reducing costs. With the given
feasible solution that we calculated using the Vogel's Approximation Method (VAM) which is:

To A B C Supply
From
1 8 10 12 100 70
30 70
2 6 9 11 300 180
120 180
3 12 7 14 150
150
Demand 120 180 30 250 70

Step 4: Identify the Closed Path

A closed path is a loop that starts and ends at an unallocated cell and does not self-intersect. This
path alternates between empty and occupied cells and may be found by starting at an unoccupied cell
with the lowest opportunity cost and tracing it back to the beginning. The vacant cells in the above
possible solution are A1, B2, A3, and C3.

To A B C Supply
From
1 8 10 12 100
30 70
2 6 9 11 300
 120 180
3 12 7 14 150
150
Demand 120 180 250

A1: 8 + ( -12 ) + 11 + ( -6 ) = 1

To A B C Supply
From
1 8 10 12 100
30 70
2 6 9 11 300
120 180
3 12 7 14 150
150
Demand 120 180 250

B2: 9 + ( -11 ) + 12 + ( -10 ) = 0

To A B C Supply
From
1 8 10 12 100
30 70
2 6 9 11 300
120 180
3 12 7 14 150
150
Demand 120 180 250

A3: 12 + ( -7 ) + 10 + ( -12 ) + 11 + ( -6 ) = 8

To A B C Supply
From
1 8 10 12 100
30 70
2 6 9 11 300
 120 180
3 12 7 14 150
150
Demand 120 180 250

C3: 14 + ( -12 ) + 10 + ( -7 ) = 5

Step 5: Assessing Optimality

If all opportunity costs are positive or zero (i.e., no negative opportunity costs), the present
solution is optimum, and you can proceed to the next phase. If there are still negative opportunity costs,
go to the following stage for additional refining.

Since there are no negative opportunity costs in the supplied viable solution, indicating that the
existing solution is optimum and no more modifications are required. The solution is affordable and may
be regarded definitive.

Step 6: Enhancing the Solution

Among the closed paths found in Step 5, find the one with the lowest amount. Apply the same
quantity to the cells along the path for this specific closed path: Increase the quantity in even-numbered
cells (those that are already filled). Reduce the quantity in odd-numbered cells (the empty ones). Change
the quantities assigned to the cells as needed.

Since the given feasible solution is optimal thus there is no need for additional revisions because
the proposed practicable option has no negative opportunity cost.

Step 7: Iteration and Final Solution

Step 7 entails a continual cycle of improving the solution, beginning with Step 4 and continuing
as long as there are negative opportunity costs. Each cycle seeks to improve the solution by moving
units along restricted pathways with negative opportunity costs. When no negative opportunity costs
exist, the solution is deemed optimum, and the overall transit cost may be calculated. The figures in the
tableau now indicate the best answer to your transportation challenge. The Stepping Stone Method is an
iterative method that gradually improves the initial answer by redistributing units along certain pathways
until an ideal solution is obtained. Since the given feasible solution is optimal with a total cost of:

Source – Destination Quantity Shipped x Unit Total Cost

Cost
X1B 30 x 10 300
X1C 70 x 12 840

X2A 120 x 6 720

X2C 180 x 11 1,980

X3B 150 x 7 1,050

Total Transportation P4,890
Cost

Thus, Stepping Stone Method which is applied to the given feasible solution , concludes that
there are no negative opportunity costs, indicating an optimal solution has been reached. At this stage,
the distribution of goods is at its most cost-efficient, and the total transportation cost can be computed
based on this solution.