30-11-2012, 06:32 PM
VOGEL’S APPROXIMATION METHOD
1VOGEL’S APPROXIMATION.pptx (Size: 76.98 KB / Downloads: 33)
It is a heurestic method and is preferred to the other methods as it gives an initial solution which is nearer to an optimal solution itself.
In this method each allocation is made on the basis of the opportunity cost
STEPS IN VAM
Step 1: Calculate penalties for each row(column)by taking the difference betwween the smallest and next smallest unit transporation cost in the same row(column).This difference indicates the penalty(or extra or opportunity cost)which has to be paid if one fails to allocate to the cell with the minimum unit transportation cost.
Step 2: Identify the row(or column)with the largest penalty and allocate the maximum possible quantity to the lowset cost cell in that selected row(column)so as to exhaust either the supply at a particular source or satisfy demand at a warehouse.
REMARK
Though the vogel’s approximation method has the disadvantage of more computational work before the initial solution is reached,it usually results with an assignment which has less transportation cost associated with it than the cost associated with a solution obtained by other method.this ultimately helps in obtaining the optimal solution.
AREA OF APPLICATION
It is used to compute transportation routes in such a way as to minimize transportation cost for finding out locations of warehouses.
It is used to find out locations of transportation corporations depots where insignificant total cost difference may not matter.