Simulation and Optimization are terms employed by researchers and analysts who are attempting to learn something about natural or human systems by building and executing mathematical models of those systems. Mathematical models are typically systems of variables and equations which represent objects and behaviors found in the real life systems which modelers are trying to understand and, thereby, predict. In the past few hundred years, scientists and engineers have gotten to be very good at building models of natural systems. Using these models they have been able to increase their understanding of these systems and, as a result, are now able to predict what will happen when they utilize these systems in new ways.

The purpose of this study was to develop a model of the production, transmission, and demand for natural gas which would represent the effects of Federal Power Commission regulation in a realistic manner and which could be used as a tool for analysis of alternative FPC policies regarding producers, interstate pipelines, and the allocation of natural gas in times of shortage. This thesis describes the development of GASNET, a mathematical programming model of the U.S. natural gas system, from its theoretical formulation to its implementation on the SESAME mathematical programming system to forecasts of supply and demand for natural gas in 1980.

In the natural gas marketing industry, sourcing and routing of natural gas is a dynamic process consisting of a sequence of successively consistent commitments to buy, transport and sell natural gas. The cost of this process is complex, consisting not only of supply and transportation, but also of administering the process. This paper presents a description of GRIDNET, a recently implemented system for optimizing this complex multi-objective business operation.

Gridnet is an embedded-network-based LP system for simultaneously optimizing very large natural gas sourcing and transportation acquisition operations. Using the PS/2-based Wizard i860 co-processor, Gridnet solves generalized network problems with over 18,000 nodes and 200,000 arcs in under five minutes. The paper discusses the need and requirements for this system as well as the technical approach, implementation, and effects of installation at five user sites.