1.1 Opetation research is used to
solve organization's problems
220.127.116.11 Formulate the problem
18.104.22.168.1 Define the problem
22.214.171.124.1.1 Organization objectives
126.96.36.199.1.2 parts of the organization must be
studied before the problem can
188.8.131.52 observe the system
184.108.40.206.1 collect's data
220.127.116.11.1.1 stimates values and parameters
18.104.22.168.1.2 affect organizations plorbems
22.214.171.124 Formulate a mathematical model of the problem
126.96.36.199.1 Many mathematicla techniques that can be used to model systems
188.8.131.52 Verify the Model and Use the Model for Prediction
184.108.40.206.1 The operations researcher now tries to determine if the mathematical model
developed in step 3 is an accurate representation of reality.
220.127.116.11.1.1 check and see if (1) accurately represents yield for values of the decision variables
that were not used to estimate (1).
18.104.22.168.1.1.1 then we might have to add new constraints to our model, and
the yield of the process [and Equation (1)] might change.
22.214.171.124 Select a Suitable Alternative
126.96.36.199.1 s, the operations researcher now chooses the alternative that best meets the
188.8.131.52 Present the Results and Conclusion of the Study to the Organization
184.108.40.206.1 After presenting the results 1.2 The Seven-Step
Model-Building Process 5 of the operations
220.127.116.11.1.1 This may result from incorrect definition of the organization’s problems or
from failure to involve the decision maker from the start of the project
18.104.22.168.1.1.1 return to stps
22.214.171.124 Implement and Evaluate Recommendations
126.96.36.199.1 The analyst aids in implementing the recommendations
and the system must be constantly monitored
2 CITGO Petroleum
2.1 Optimizing Refinery Operations
188.8.131.52 Minimize the cost of operating CITGO’s refineries.
184.108.40.206 The Lake Charles, Louisiana, refinery
220.127.116.11.1 1. Cost of producing each of CITGO’s products
depends on the inputs used to produce each
18.104.22.168.2 2. Installation of a new
22.214.171.124.3 3.The yield associated with each input–output
126.96.36.199.4 4.To reduce maintenance costs, data were
collected on parts inventories and equipment
188.8.131.52 To reduce maintenance costs, data were collected on parts inventories
and equipment breakdowns.
184.108.40.206 To validate the model, inputs and outputs from the Lake Charles refinery were collected for
220.127.116.11 Running the LP yielded a daily strategy for running the refinery. For instance, the model might, say,
produce 400,000 gallons of turbine fuel using 300,000 gallons of crude 1 and 200,000 gallons of crude 2.
18.104.22.168 the model was used to guide day-to-day
2.2 The Supply Distribution Marketing
22.214.171.124 CITGO wanted a mathematical model that could be used to make supply,
distribution, and marketing decisions such as:
126.96.36.199.1 1.Where should crude oil be purchased?
188.8.131.52.2 2. Where should products be sold?
184.108.40.206.3 3. price should be charged for products?
220.127.116.11.4 4. How much of each product should be held in inventory?
18.104.22.168 A database that kept track of sales, inventory, trades, and exchanges of all
refined products is installed.
22.214.171.124 The model makes all decisions mentioned in step 1.
126.96.36.199 The forecasting modules are continuously evaluated to ensure that they continue to give accurate
188.8.131.52 s. A new vice-president was appointed to coordinate the operation of the SDM and LP
refinery model. The product supply and product scheduling departments were combined
to improve communication and information flow.