Vogel's Approximation Method - Management Assignment Help

Vogel's approximation method is a mathematical process to solve logistics related problems.

For example, there are 3 factories producing to 4 warehouses. We have the data of each factories production capacity, demand of each transportation and warehouse cost from each factory to every warehouse. Vogel's method can be used to find out an optimal solution to cost of transportation.

The method is iterative in nature. It means that we make some initial assumption and calculate "Initial solution".

This method is more systematic and orderly than least cost method. Here penalties for each column and row of the transportation table are determined, and the row or column with largest penalty is chosen for allocation. Then the cell with lowest cost form the selected row column is allocated the maximum possible.

After this the row or column whose supply or demand is exhausted is exhausted is deleted and the penalties are again calculated for the shrunken table. The procedure continue still full demand supply is exhausted.

Here penalty of each row column = second lowest – lowest costs of that row / column

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