Supply Chain Distribution Cost Optimization Using the Transportation Model (Vogel’s Approximation Method and Modified Distribution Method)

Abstract

Distribution costs remain a major concern in supply chain management, yet comparative evidence on transportation allocation methods across business settings remains fragmented. This study compared initial solutions generated by the North-West Corner (NWC), Least Cost, and Vogel’s Approximation Method (VAM) and examined optimality assessments using the Modified Distribution Method (MODI) and Stepping Stone method. A descriptive-comparative quantitative approach was applied to secondary data on transportation costs and allocations reported in published logistics and manufacturing case studies. The analysis compared initial transportation costs and reported optimization outcomes across methods. At UKM Rajawali Kaca, VAM yielded a distribution cost of IDR 180,200, compared with IDR 181,900 using Least Cost and IDR 229,500 using NWC. At Pabrik Tahu Dompyong Wetan, VAM and NWC produced identical costs of IDR 196,000. At PT Tirta Utama Abadi, optimization reduced the reported distribution cost for November 2025 from IDR 21,794,083 to IDR 19,331,108. These findings suggest that VAM can provide a competitive initial allocation, although its advantage is context-dependent and subsequent optimality assessment remains necessary to establish minimum transportation costs. The study provides comparative evidence to inform distribution planning and highlights opportunities to extend transportation models by incorporating vehicle capacity constraints and demand variability.