In addition to the northwest corner and intuitive lowest-cost methods of setting an initial solution to transportation problems, we introduce one other important technique—Vogel’s approximation method (VAM). VAM is not quite as simple as the northwest corner approach, but it facilitates a very good initial solution—as a matter of fact, one that is often the optimal solution. Vogel’s approximation method tackles the problem of finding a good initial solution by taking into account the costs associated with each route alternative. This is something that the northwest corner rule did not do. To apply the VAM, we first compute for each row and column the penalty faced if we should ship over the second best route instead of the least-cost route.