In this paper, a general fuzzy transportation problem model is discussed. There are several approaches by different authors to solve such a problem viz., [1,2,3,6,7,8]. We introduce octagonal fuzzy numbers using which we develop a new model to solve the problem. By defining a ranking to the octagonal fuzzy numbers, it is possible to compare them and using this we convert the fuzzy valued transportation problem (cost, supply and demand appearing as octagonal fuzzy numbers) to a crisp valued transportation problem, which then can be solved using the MODI Method. We have proved that the optimal value for a fuzzy transportation problem, when solved using octagonal fuzzy number gives a much more optimal value than when it is solved using trapezoidal fuzzy number as done by Basirzadeh [3] which is illustrated through a numerical example.

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