The Challenges and Success Factors in Implementing an Integrated Products Planning System for Citgo

Citgo Petroleum Corporation has recently realized a reduction in petroleum products inventory of $116 million (based on historical inventory-to-sales ratios), resulting in annual interest savings of $14 million, as well as improvements in coordination, pricing, and purchasing decisions estimated at $2.5 million annually. An optimization-based decision support system coupled with a state-of-the-art, on-line corporate data base provides management with the information which resulted in these benefits. These profit improvements are the documented benefits of an approach which combines management science and top management skills to achieve a comprehensive program for controlling working capital and planning operations.