MODEL CONSTRUCTION PROCESS

MODEL CONSTRUCTION PROCESS

1. 1. Formulate the Problem

   • Minimize the cost of operating CITGO’s refineries.
     • 1 Where should crude oil be purchased?
     • 2. Where should products be sold?
     • 3 What price should be charged for products?
     • 4 How much of each product should be held in inventory?

2. 2. Observe the System

   • The refinery was observed for an estimated time
     • A database was installed
     • Control and elaboration of Pronostico

3. 3. Formulate a Mathematical Model of the Problem

   • Model was developed to optimize refinery operations.
     • Cost minimization
     • Inputs to produce the desired outputs
     • Restrictions

4. 4. Verify the Model and Use the Model for Prediction

   • Data collection and comparison for one month
     • Are continuously evaluated to ensure that they continue to provide accurate forecasts

5. 5. Select a Suitable Alternative

   • Yielded a daily strategy for running the refinery
     • A minimum cost network flow model (MCNFM)

6. 6. Present the Results and Conclusion

   • Running the LP
     • The Supply Distribution Marketing (SDM) System

7. 7. Implement and Evaluate

   • The model was used
     • Organizational Changes
     • Combination of departments C
     • ommunication improvements

8. OPTIMIZING OPERATIONS

9. MINIMIZE THE COST OF OPERATING

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