1. Suppose that a firm has three factories /sources of supply/ & four warehouses /point of demand/. The firm's production capacity at the three factories, the demand for the four destination centers located at various regions & the cost of shipping each unit from the factories to the warehouses through each route is given as follows:

Destinations

	W1	W2	W3	W4	Factory Capacity
F1	3	2	7	6	5000
F2	7	5	2	3	6000
F3	2	5	4	5	2500
Demand	6000	4000	2000	1500	13500

Required:

1. Develop an initial feasible solution using VAM & compute the total cost.
2. Determine its optimality using MODI method