Question 1 (32 marks)

ABC Warehouse is a fast moving consumer goods (FMCG) distribution company that is headquartered in Windhoek. As part of their normal operations, they have to schedule transportation of goods. The following costs, supply, and demand have been given for one of their normal operations:

From			To
	Okahandja	Otjiwarongo	Otavi	Tsumeb	Supply
Warehouse A	N$500	N$750	N$300	N$450	12
Warehouse B	N$650	N$800	N$400	N$600	17
Warehouse C	N$400	N$700	N$500	N$550	11
Demand	10	10	10	10

Requirement		Mark
		Sub- total	Total
1.1	Is this a balanced transportation problem? Why?	2	2
1.2	Find the initial solution using the northwest corner method and Vogels approximation model (VAM). Compute the total cost for each.	20	22
1.3	Using the VAM initial solution, find the optimal solution using the modified distribution method (MODI).	10	32