Application of improved Vogel's approximation method in minimization of rice distribution costs of Perum BULOG

This research was conducted at Perum BULOG Sub-Divre Medan which is the implementing institution of Raskin program for several regencies and cities in North Sumatera. Raskin is a program of distributing rice to the poor. In order to minimize rice distribution costs then rice should be allocated optimally. The method used in this study consists of the Improved Vogel Approximation Method (IVAM) to analyse the initial feasible solution, and Modified Distribution (MODI) to test the optimum solution. This study aims to determine whether the IVAM method can provide savings or cost efficiency of rice distribution. From the calculation with IVAM obtained the optimum cost is lower than the company's calculation of Rp945.241.715,5 while the cost of the company's calculation of Rp958.073.750,40. Thus, the use of IVAM can save rice distribution costs of Rp12.832.034,9.