closely with the classification system

now employed by ERDA. This "map

of the energy R&D terrain" provides
a higher resolution view of areas most
critical to Appalachian interests, but
lesser detail in areas not considered as
important.
Using these R&D categories,
funding profiles have been compiled for
the major program areas for the period
FY 1969 through FY 1977. Procedures
have been established for updating
these profiles so that the ARC staff
may continue to track appropriation
trends by major program area, and
assess how the Federal government is
allocating its R&D dollars.
A ranking methodology has been
developed which imputes relative
"scores" to the various program
categories based upon a set of criteria
specifically selected to emphasize Appalachian concerns. The scores may
then be compared to both corresponding appropriation levels, as well as to
external appraisals of required emphasis deemed necessary to realize program-specific
R&D
goals.
This
comparison will serve to highlight apparent
"mismatches"
from
Appalachia's viewpoint between funding
allocations to various R&D categories
and the prospective payoffs they represent to the Region.
Finally, the inventory of projectby-project abstracts serves as a detailed
reference to the translation of appropriation into action and the manner in
which the various Federal agencies
have interpreted their respective R&D
mandates. Additionally, the abstracts
also provide ready reference to technical project documentation and key contact points within both the sponsoring
and sponsored organizations. The inINTERFACES

August 1977

57

ventory currently contains both active

and completed projects from FY f975
and FY 1976, and may be updated via
direct access to the ERDA and other
computerized inventories.
The methodology is currently undergoing a review process with a panel
of energy R&D "experts" using the
Delphi approach.
/Robert Ciliano, Mathtech Division,
MATHEMATICA, Inc., P.O. Box
2392, Princeton, New Jersey 08540
FROM MEXICO: A WHEAT
DISTRIBUTION MODEL
The wheat distribution system in
Mexico involves daily decisions. These
decisions relate to the distribution of
wheat from 15 grain producing centers
located in the northwestern part of the
country to 155 mills in 53 of the major
cities of Mexico. The distribution is
done by the National Company of Basic Commodities (CONASUPO), a decentralized agency of the Mexican
Government.
The directors of the distribution
program in CONASUPO sought the
advice of the company's operations research group in formulating a distribution model to be used as a tool in the
decision making process. Two people
worked full time for two months in the
formulation, construction and evaluation of the model. They also participated, along with the wheat distribution
group of CONASUPO, in the implementation of the model. The resultant distribution model was evaluated
during May and June of 1974, and was
implemented in July of the same year.
It has been used ever since by the
wheat distribution group of CONASUPO.
The model is a linear program-

ming one whose main objectives are as

follows:
(a) to program monthly the realization of contracts previously
signed by CONASUPO with each
of the grain mills;
(b) to achieve lower distribution
costs;
(c) to improve the distribution
process.
Presently the model is run once a
month, but it is sufficiently flexible that
it could be used for any time period
(daily, weekly or quarterly). It requires
only a few minutes of computer time
to obtain the desired results.
The monthly operation of the
model, which requires eight man-hours
per month, includes:
(a) preparation of the input information provided by the wheat distribution group of CONASUPO;
(b) execution of the program by
the computer;
(c) analysis and presentation of the
model results to the decision making group.
The recommendations derived
from the model are evaluated and adjusted by the wheat distribution decision making group, whose past
experience is used to make the ultimate
recommendations. These final recommendations differ in practice from the
model-based recommendations in a
range of 5% to 40%.
The total cost of the formulation,
construction and evaluation of the
model was approximately 6,000 U. S.
dollars. The cost of implementation
was approximately 2,500 U. S. dollars.
The monthly cost of running the model
is about 40 U. S. dollars. This model
saved CONASUPO approximately 7
million U. S. dollars during the last six

months of 1974. Savings have increased since. Dr. Juan Prawda was the
O.R. group leader.
/Correspondent Carbajal/
MANAGEMENT SCIENCE
MODEL USED IN BELL
SYSTEM CORPORATE
PLANNING
Mr. William G. Sharwell, the
American Telephone and Telegraph
Company Vice President responsible
for planning, spoke at a December 15,
1976 luncheon meeting in New York.
He indicated that the job of planners is not to plan. Instead, planners
should provide a workable, convenient
process and format for planning. In
addition they should survey all plans
developed by others for apparent gaps,
inconsistencies, or lack of realism.
The planning process should involve managers as far down in the
organization as feasible. Two good reasons for this are: (1) this takes advantage of a more detailed knowledge of
local conditions and (2) this allows people to have some voice in their future
activities, which they like and deserve.
The planning process in the Bell
System can be divided into three undertakings. The first undertaking involves planning by 21 subsidiary OTCs
(New York Telephone, New Jersey
Bell, Southern Bell, etc.) and the parent, AT&T. Each unit develops a five
year plan.
The second undertaking involves
the aggregation of the 21 OTC plans
along with the AT&T plan into an
integrated plan, and the analysis of the
integrated plan. One part of the analysis involves a "top-down" projection
with a management science model
based on historical data and trends

58

INTERFACES

August 1977