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CMA Intermediate · Operations Management and Strategic Management · Transportation

In Vogel's Approximation Method, a row has unit costs of Rs 14, Rs 9, Rs 11 and Rs 17. What is the penalty for this row?

The penalty is Rs 2. Vogel's method takes the difference between the lowest and the next lowest cost in a row or column. Here the lowest cost is Rs 9 and the next is Rs 11, so the penalty is 11 - 9 = Rs 2.

  1. ARs 2Correct
  2. BRs 3
  3. CRs 5
  4. DRs 8

Explanation

The penalty is the difference between the two smallest costs in the row. The two smallest are 9 and 11, so the penalty is 2. Rs 5 comes from using 14 - 9, which does not use the two lowest costs.

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