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 1.1 Is this a balanced transportation problem? Why?

1.2 Find the initial solution using the northwest corner method and Vogel's approximation model (VAM). Compute the total cost for each.

1.3 Using the VAM initial solution, find the optimal solution using the modified distribution method (MODI).

Note: Show all the necessary workings or steps that are required to reach the answer. Marks are available for these.