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Example from (Here) YouTube illustrates how to solve degeneracy in transportation problem.

Its explanation in pdf is here:
Suppose we used least cost / vogel to get this feasible solution. Now our task is to find the optimal one using MODI method.
Suppose we used least cost / vogel to get this feasible solution. Now our task is to find the optimal one using MODI method.

When will we know the solution has degeneracy?

Step 1 of MODI: Check if there is a degeneracy.

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Now, we know there is a degeneracy. We want to find independent cells on which it can solve the problem.
 

What is independent cell?

Step 2 of MODI: Given there is a degeneracy, find independent cells on to solve the problem.

2 conditions:
  1. Unallocated cells that cannot form a closed loop
  1. Has the lowest value (e.g., cost)
 
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Step 3 of MODI: After confirming the independent cell, the degenerate issues is solved.

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Step 4 we continue doing the MODI, until the optimality is reached.

Here is the solution:
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FIT3158 Note - W5 Network ModellingFIT3158 Note - W6 MODI