The Modified Distribution (MODI)

This method is more productive and serviceable than steppingstone. This is a method
for cell evaluation based on the dual variables in a transportation problem. The method
precludes the necessity for finding a different closed loop to evaluate each empty cell.

It allows us to compute improvement indices quickly for each unused square

without drawing all of the closed paths. Because of this, it can often give substantial
time savings over the steppingstone method for transportation table.

FORMULA:
The MODI method involves the following steps:
1. a. Vi + Wj = Cij where:
Vi = the dual variables associated with the ith source
constraint. Wj = the dual variables associated with the jth
source constraint.
Cij = the cost of shipping one unit from the ith source to the jth destination
b. the value of an occupied cell: UC = Cij – Vi - Wj
2. Write the complete set of equations in the style formula 1(a) for all occupied
cells in the transportation table.
3. Write the complete set of equations in the style formula 1(b) for all occupied
cells in the transportation table.
4. Set the first Vi in Step 2 equal to zero. It till then be possible to obtain
numerical values for all of the dual variables.
5. Use the numerical values you obtained in the Step 4 to solve the equation in Step 3.

Example 1:
PROJECTS
Warehouses 1 2 3 supply
50 20 40
A 120

B 30 50 40 180

40 30 20
C 150

Demand 100 170 180 450 450

 W1 W2 W3
1 2 3 supply
50 20 40
V1 100 20 120

V2 30 50 40 180
150 30
40 30 20
V3 150 150

Demand 100 170 180 450 450

The initial distribution is the same as in the steppingstone obtained by northwest

corner rules as the starting point.

Let Cij = cost/unit to particular occupied cell.

Vi + Wj = Cij

Computed value from occupied cells is as follows:

A1: V1 + W1 =
50 A2: V1 + W2 We must assume V1 = 0 to be
= 50 B2: V2 + able to solve the remaining
W2 = 50 B3: V2
variables.
+ W3 = 50 C3:
V3 + W3 = 50

At V1 = 0
A 1: 0 + W1 = 50 B2: V2 + W2 = 50 at W2 =
20 W1 = 50 V2 = 50 - 20
V2 = 30

A2: 0 + W2 = 20 B3: V2 + W3 = 40 C3: V3 + W 3 =

40
W2 = 20 30 + W3 = 40 V3 = 20 –
10
W3 = 10 V3 = 10
 Table 1 (with the indicated factor values)

W1 = W2 = 20 W3 = 10
50 2 3 supply
1
50 20 40
V1 = 0 100 20 120

V2 = 30 30 50 40 180
150 30
40 30 20
V3 = 10 150 150

Demand 100 170 180 450 450

To test for improvement, evaluate the vacant/unoccupied cells for the net
contribution to cost, by subtracting V1 and Wj from cost (CB) of vacant cells.
Cij – Vi - Wj

Vacant Cells:
B1: Cij = 30; V2 = 30; W1 = 50 B1: 30 – 30 – 50 =
-50
A3: Cij = 40; V1 = 0; W3 = 10 A3: 40 – 0 – 10 =
30
C1: Cij = 40; V3 = 10; W1 = 50 C1: 40 – 10 - 50 =
The improvement shows that B1 hast negative (-50), as in the steppingstone method.
Choose the least negative or most negative entry from used cells.

- 50 + 20
100 20

+ 30 - 50
100 150

After the transfer, the entries become:

50 20
120

30 50
100 50
Table 2

W1 = 50 W2 = 20 W3 = 10
1 2 3 supply
50 20 40
V1A 120 120

V2B 30 50 40 180
100 50 30
40 30 20
V3C 150 150

Demand 100 170 180 450 450

Occupied Cells:
A2: V1 + W2 = 20 Let: V1 = 0
B1: V2 + W1 = 30 W1 = 0
B2: V2 + W2 = 50 V2 = 20
B3: V2 + W3 = W3 = 30
40 B1: V3 + W3 V3 = 10
= 50
W1 = W2 = 20 W3 = 10
50 2 3 supply
1
50 20 40
V1 = 0 120 120

V2 = 30 30 50 40 180
100 50 30
40 30 20
V3 = 10 150 150

Demand 100 170 180 450 450

Cell cost:
A2: 120(20) = 2,400.00
B1: 100(30) = 3,000.00
B2: 50(50) = 2,500.00
B3: 30(40) = 1,200.00
C3: 150(20) = 3,000.00
₱12,100.00
Testing for Improvement:
Vacant Cells:
A1: CB = 50; V1 = 0; W1
= 0; A1: 50 – 0 – 0 = 50
A3: CB = 40; V1 = 0; W3 =
10; A3: 40 – 0 – 10 = 30
C1: CB = 40; V3 = 10; W2 =
20; C1: 40 – 10 – 0 = 30
C2: CB = 30; V3 = 10; W2 =
20; C2: 30 – 10 – 20 = 0

Since there is no negative improvement, the answer is ₱12,100.

 The Unbalanced Transportation Table (Minimization)
The unbalanced transportation table (minimization) is situational where quantity
demand is greater than quantity supplied and vice versa. To be able to solve unbalanced
table.
Note:
1. If a demand is greater than supply, use or add a dummy supply/dummy row.
2. If a supply is greater than demand, use or add a dummy demand/dummy column.
Example 1.
A B Supply
3 30
1 50

3 50
2 10

2 60
3 45

Demand 30 70 100
105
Supply is greater than demand.
The given table unbalanced, since supply = 105 and demand = 100. S > D …
Add dummy demand.
Add new column with 0 – cost.

Table 1

1 2 3 Supply
3 4 0
A 30 20 50

B 3 7 0 10
10
C 2 4 0 45
40 5
Demand 30 70 5 105 105

144
 Cell Costs: Improvements: (Vacant Cells)
A1:30(3) = 90.00 A3: 0 – 4 + 4 – 0 = 0
A2:20(4) = 80.00 B1: 3 – 7 + 4 – 3 = -3
B2:10(7) = 70.00 B3: 0 – 7 + 4 – 0 = -3
C2:40(4) =160.00 C1: 2 – 4 + 4 – 3 = -1
C3:5(0) = 0.00
₱400.00
By choosing B1:
1 2

- 3 + 4
30 20
+ 3 - 7
10

After the Transfer the entries become:

3 4
20 30
3 7
10

Table 2

1 2 3 Supply
3 4 0
A 20 30 50

B 3 7 0 10
10
2 4 0
40 5
 Cell Costs: Improvements: (Vacant Cells)
A1:30(2) = 60.00 A3: 0 – 4 + 4 – 0 = 0
A2:20(6) =120.00 B1: 7 – 4 + 3 – 3 = 3
B2:10(3) = 30.00 B3: 0 – 0 + 4 – 4 + 3 - 3 = 0
C2:40(4) =160.00 C1: 2 – 3 + 4 – 4 = -1
C3:5(0) = 0.00
₱370.00
By choosing C1:
1 2

- 3 + 4
20 30
+ 2 - 4
40

After the Transfer the entries become:

3 4
50
2 4
20 20

Table 3

1 2 3 Supply
3 4 0
A 50 50

B 3 7 0 10
10
2 4 0
20 20 5

C 45

Demand 30 70 5 105 105

146
 Cell Costs: Improvements: (Vacant Cells)
A2:50(4) =200.00 A1: 3 – 4 + 4 – 2 = 1
B1:10(3) = 30.00 A3: 0 – 0 + 4 – 4 = 0
C1:20(2) = 40.00 B2: 7 – 4 + 2 – 3 = 2
C2:20(4) = 80.00 B3: 0 – 3 + 2 – 0 = -1
C3:5(0) = 0.00
₱350.00
By choosing B3:
1 2

- 3 + 0
10
+ 2 - 0
20 5

After the Transfer the entries become:

3 4
5 5
2 4
25

Table 4

1 2 3 Supply
3 4 0
A 50 50

B 3 7 0 10
5 5
2 4 0
25 20
 Cell Costs: Improvements: (Vacant Cells)
A1:50(4) =200.00 A1: 3 – 4 + 4 – 2 = 1
B1: 5(3) = 15.00 A3: 0 – 0 + 3 – 2 + 4 – 4 = 1
B3: 5(0) = 0.00 B2: 7 – 4 + 2 – 3 = 2
C1:25(2) = 50.00 C3: 0 – 2 + 3 – 0 = 1
C2:20(4) = 80.00
₱345.00
Since there is no negative value on Improvements, the minimum costs is
₱345.00 Modifications Distribution (MODI) Unbalanced Table:
Example 2.

1 2 Supply
1 4
A 50

3 7
B 10

2 4
C 45

Demand 30 70 100 105

*Since the supply is greater than (>) demand, dummy must be added

Table 1

W1 W2 W3 Supply
1 4 0
V1 30 20 50
3 7 0
V2 10 10

2 4 0
V3 40 5 45
105
Demand 30 70 5
105

148
Cell Costs: Occupied cells:
A1:30(1) = 30.00 V1 + W1 = 1, V1 = 0; W1
=1
A2: 20(4) = 80.00 V1 + W2 = 4, W2
B2: 10(7) = 70.00 = 4 V3 + W2 = 4,
C2:40(4) = 160.00 V3 = 0 V 3 + W3 =
₱345.00 0, W3 = 0

Table 1

W1 = 1 W2 = 4 W3 = 0 Supply
1 4 0
V1 = 0 30 20 50

V2 = 3 3 7 0 10
10
2 4 0
V3 = 0 40 5 45

Demand 30 70 5 105 105

Vacant Cells:
A3: 0 – 0 – 2 = -2
B1: 3 – 3 – 1 = -1
B3: 0 – 3 – 0 = -3
C1: 2 – 0 – 1 = 1

By Choosing B1:

1 4
-30 +20
3 7
+ -10

After the transfer, the entries become:

1 4
20 30
3 7
10
Table 2

W1 = W2 = W3 = Supply
1 4 0
V1 = 20 30 50

V2 = 3 7 0 10
10
2 4 0
V3 = 40 5 45

Demand 30 70 5 105 105

Cell Costs: Occupied cells:

A1:20(1) = 20.00 V1 + W1 = 1, at V1 = 0; W1
=1
A2: 30(4) =120.00 V1 + W2 = 4, W2 = 4
B1: 10(3) = 30.00 V2 + W1 = 3, V2 = 2
C2:40(4) = 160.00 V3 + W2 = 4, V3 = 0
C3: 5(0) = 0.00 V3 + W3 = 4, W3 = 0
₱330.00
Table 2

W1 = 1 W2 = 4 W3 = 0 Supply
1 4 0
V1 = 0 30 20 50

V2 = 2 3 7 0 10
10
2 4 0
V3 = 0 40 5 45

Demand 30 70 5 105 105

Vacant Cells:

A3: 0 – 0 – 0 = 0
B2: 7 – 2 – 4 = 1
B3: 0 – 2 – 0 = -2
C1: 2 – 0 – 1 = 1

150
 By Choosing B3:

1 4 3
+20 -30
3 7 4
10 +
2 4 4
+40 -5

The new table after distributing (-5) is shown below.

1 4 3
25 25
3 7 4
5 5
2 4 4
45

Table 3

W1 = W2 = W3 = Supply
1 4 0
V1 = 25 25 50
3 7 0
V2 = 5 5 10

2 4 0
V3 = 40 45

105
Demand 30 70 5
105

Cell Costs: Occupied cells:

A1:25(1) = 25.00 V1 + W1 = 1, at V1 = 0; W1 = 1
A2:25(4) =100.00 V1 + W2 = 4, W2 = 4
B1: 5(3) = 15.00 V2 + W1 = 3, V2 = 2
B3: 5(0) = 0.00 V2 + W3 = 0, W3 = -2
C2:45(5) = 225.00 V3 + W2 = 4, V3 = 0
₱365.00

151
Table 3
W1 = 1 W2 = 4 W3 = -2 Supply
1 4 0
V1 = 0 25 25 50

V2 =2 3 7 0 10
5 5
2 4 0
V3 = 40 45

Demand 30 70 5 105 105

Cell Costs: Occupied cells: Improvements: (Vacant Cells)

A1:25(1) = 25.00 V1 + W1 = 1, at V1 = 0; W1 = 1 A3: 0 – 0 + 2 = 2
A2:25(4) =100.00 V1 + W2 = 4, W2 = 4 B2: 7 – 2 – 4 = 1
B1: 5(3) = 15.00 V2 + W1 = 3, V2 = 2 C1: 2 – 0 – 1 = 1
B3: 5(0) = 0.00 V2 + W3 = 0, W3 = -2 C3: 0 – 0 + 2 = 2
C2:45(5) = 225.00 V3 + W2 = 4, V3 = 0
₱365.00

Since there is no negative in the improvement, the above table is optimum: ₱365.
Solve the following: MODI (Modified Distribution)

1. Aling Miling, a fruit trader, sells fruits to shoppers in Manila,

Quezon City, and Caloocan City. The monthly demand is 5,000
kilos in Metro Manila, 3,000 kilos in Quezon City, and 2,000
kilos in Caloocan City. The fruits are shipped from Laguna,
Batangas, and Mindoro. The monthly supply offered in Laguna
is 4,000 kilos, In Batangas 3,500 kilos, and 2,500 kilos in
Mindoro.

The Shipping Cost per kilo is shown below:

To Manila Caloocan City Quezon City
From
LAGUNA ₱5 ₱55 ₱60
BATANGAS ₱65 ₱66 ₱60
MINDORO ₱74 ₱75 ₱80
What is the lowest transportation cost?