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