Procedure to solve the Transportation Problem using MODI Method:

Step 1: Check for Demand & Supply. Step 2: Find out the Initial Basic Feasible Solution by
using any one of the 3 methods.

Step 3: Perform Optimality Test:

m+n-1 = no. of allocations where m:- no of rows & n:- no of columns

Step 4: for each Occupied Cell, we will find out a set of no

ui & vj satisfying Cij = ui + vj. Form equations. Solve these equations for the values of ui & vj.

Step 5: For each Unoccupied Cell, Compute Cij as ui + vj ,

using the values of ui & vj obtained in step 4. C ij is to be written in the bottom left corner of the cell.

Step 6: For each Unoccupied Cell, find out the net

evaluations as ij = Cij - Cij. ij is to be written in the bottom right corner of the cell. Observe the values of ij: If all ij > 0 ------------- Present solution is optimum and unique. If ij 0-------------Present solution is optimum and alternate solution also exist.

If any ij 0 ---------- Present solution is not optimum & we need to go for Modified Distribution

Select the unoccupied cell with the largest negative opportunity cost or ij value. Put a * mark in that cell. Draw a closed loop starting from * having occupied cells at the other corners. Assign alternate +ve & -ve signs at the corners of the loop, with 1st +ve sign at the * marked cell. Determine the maximum no of units that should be transferred to this cell as = min { -ve marked cells} Add to +vely marked cells And subtract from vely marked cells. This will give us Modified Distributions.

Repeat step 3,4& 5 & 6 for these allocations . Take decisions depending on the values of ij.