Basic feasible solution is the initial solution of transportation problem. There are several transportation
algorithms to determine feasible solution. These algorithms are only way to get optimal solution because optimal
solution obtains from the initial basic feasible solution using some optimality test methods such as MODIModified
Distribution Method and Stepping Stone Method where MODI is the most efficient method to
determine optimal solution. Before applying MODI on feasible solution we have to resolve degeneracy if it
occurs and also make sure that allocations (non-negative basic variable) are should not form a closed loop when
we draw horizontal and vertical paths from allocated cells to allocated cells. Degeneracy occurs when supply and
demand are satisfied simultaneously it can be resolved if one row or column of them is crossed out and another
remains with zero supply or demand. Difficulty arise when if all uncrossed out rows or column have (remaining)
zero supply or demand. In that case, Vogel‟s Approximation Method (VAM) and some other methods solve that
by allocating these zero supply or demand using Least Cost Method (LCM). But in some problem when we
make allocation by LCM in that particular case then closed loop is formed and not possible to apply any
optimality test method. So that optimal solution is not possible to determine in that case. In this paper we resolve
this particular problem and find a new approach to allocate zero supply or demand so that closed loop will not be
formed