MODI METHOD UNBALANCED
PROBLEM:
The three warehouses of Jenny Company have the following numbers of available units of
products: warehouse 1, 350; warehouse 2, 275; and warehouse 3, 200. Three customers fro
m different locations are in need of the following numbers of product: customer A, 300; custo
mer B, 225; and customer C, 200.
The transportation cost per unit for delivering the goods from the different warehouse
s to the three customers are as follows:
Project 1 Project 2 Project 3
Warehouse A Php 2.00 Php 1.00 Php 1.50
Warehouse B Php 2.00 Php 1.00 Php 0.50
Warehouse C Php 0.50 Php 1.00 Php 2.00
TABLE 1. IMPROVE TABLE
CUSTOMER A CUSTOMER B CUSTOMER C DUMMY CUST TOTAL SUPPL
OMER Y
WAREHOUSE PHP2.00 PHP1.00 PHP1.50 350
WAREHOUSE PHP2.00 PHP1.00 PHP0.50 275
WAREHOUSE PHP0.50 PHP1.00 PHP2.00 200
TOTAL DEMA 300 225 200 100 825
ND
TABLE 1. COMPLETE INITIAL TABLE
k1= 2 k2=1 k3=0.50
CUSTOMER CUSTOMER CUSTOMER DUMMY C TOTAL SUP
A B C USTOMER PLY
R1 = 0 WAREHOUSE 1 PHP2.00 PHP1.00 PHP1.50 350
300 50
R2 = 0 WAREHOUSE 2 PHP2.00 PHP1.00 PHP0.50 275
175 100
R3=1.50 WAREHOUSE 3 PHP0.50 PHP1.00 PHP2.00 200
100 100
TOTAL DEMAN 300 225 200 100 825
D
Transportation Cost
A1 ( 300 x Php 2.00 ) = Php 600.00
B1 ( 50 x Php 1.00 ) = Php 50.00
B2 ( 175 x Php 1.00 ) = Php 175.00
C2 ( 100 x Php 0.50 ) = Php 50.00
C3 ( 100 x Php 2.00 ) = Php 200.00
TRANSPORTATION COST Php 1,075.00
EQUATION OF THE OCCUPIED CELLS
r1 =0
k1 = 2-0 =2
k2 = 1-0 = 1
r2 =1-1= 0
k3 = 0.53-0= 0.50
r3 = 2-0.53= 1.50
Test for Improvement of Vacant Cells
Vacant Cells (table 1) Parth Improvement Index
A2 +2-1+1-2 = 0
A3 +0.50-2+0.50-1+1-2 = -3
B3 +1-2+0.50-1 = -1.50
C1 +1.50-1+1-0.50 = +1
TABLE 2. Second Iteration
k1= 2 k2=1 k3=0.50
CUSTOMER CUSTOMER CUSTOMER DUMMY C TOTAL SUP
A B C USTOMER PLY
R1 = 0 WAREHOUSE 1 PHP2.00 PHP1.00 PHP1.50 350
300 50
R2 = 0 WAREHOUSE 2 PHP2.00 PHP1.00 PHP0.50 275
75 200
R3= 0 WAREHOUSE 3 PHP0.50 PHP1.00 PHP2.00 200
100 100
TOTAL DEMAN 300 225 200 100 825
D
Transportation Cost
A1 ( 300 x Php 2.00 ) = Php 600.00
B1 ( 50 x Php 1.00 ) = Php 50.00
B2 ( 75 x Php 1.00 ) = Php 75.00
B3 ( 100 x Php 1.00 ) = Php 50.00
C2 ( 200 x Php 0.50 ) = Php 100.00
TRANSPORTATION COST Php 925.00
EQUATION OF THE OCCUPIED CELLS
r1 =0
k1 = 2-0 =2
k2 = 1-0 = 1
r2 =1-1= 0
k3 = 0.50-0= 0.50
r3 = 1-1= 0
Test for Improvement of Vacant Cells
Vacant Cells (table 1) Parth Improvement Index
A2 +2-1+1-2 = 0
A3 +0.50-1+1-1-2 = -1.50
C1 +1.50-0.50+1-1= +1
C3 +2- 0.50+1-1 = +1.50
TABLE 3. Third Iteration
k1= 2 k2=1 k3=0.50
CUSTOMER CUSTOMER CUSTOMER DUMMY C TOTAL SUP
A B C USTOMER PLY
R1 = 0 WAREHOUSE 1 PHP2.00 PHP1.00 PHP1.50 350
200 150
R2 = 0 WAREHOUSE 2 PHP2.00 PHP1.00 PHP0.50 275
75 200
R3=1.50 WAREHOUSE 3 PHP0.50 PHP1.00 PHP2.00 200
100 100
TOTAL DEMAN 300 225 200 100 825
D
Transportation Cost
A1 ( 200 x Php 2.00 ) = Php 400.00
A3 ( 100 x Php 0.50 ) = Php 50.00
B1 ( 150 x Php 1.00 ) = Php 150.00
B2 ( 75 x Php 1.00 ) = Php 75.00
C2 ( 200 x Php 0.50 ) = Php 100.00
TRANSPORTATION COST Php 775.00
EQUATION OF THE OCCUPIED CELLS
r1 =0
k1 = 2-0 =2
k2 = 1-0 = 1
r2 =1-1= 0
k3 = 0.50-0= 0.50
r3 = 0.50-2= -1.50
Test for Improvement of Vacant Cells
Vacant Cells (table 1) Parth Improvement Index
A2 +2-1+1-2 = 0
B3 +1-0.50+-2-1 = +1.50
C1 +1.50-0.50+1-1= +1
C3 +2- 0.50+1-1+2-0.50 = +3
Recommendation.
Table 3 shows that Jenny Company should produce steel bars for its three projects as follow
s:
From Units of Products to Transportation cost
Warehouse 1 Customer A 200 x Php 2.00 = Php 400.00
Customer B 150 x Php 1.00 = Php 150.00
Warehouse 2 Customer B 75 x Php 1.00 = Php 75.00
Customer C 200 x Php 0.50 = Php100.00
Warehouse 3 Customer A 100 x Php 0.50 = Php 50.00
Total Transportation Cost = Php 775.00
