Global
Structural Banking, Finance Research Innovation Breakthrough in
Proactive Capital Markets Asset Pricing, Strategic Asset Allocation, Risks
Management, Crisis Early Warning
Proactive Structural Dynamic Decision Analysis Supporting Strategic Reform, Change Management Maximize, Sustainable
Profit, Market Share Growth Without Job Cuts
OSA Goal,
Mission Performance oriented Problem Solving Technique: Smart proactive PC, IT
achieve Mission Impossible!:
Quantify unknown future.
Hundred
thousands integrated, global structural, dynamics, deterministic
proprietary Capital Market Asset Prices Models (CAPM) simulators
first time shown on this website
the most reliable global stock indices , currency OSA simulation charts supporting
global strategic banking finance research outsourcing centers
Breakthrough innovation in Proactive Structural Dynamic
Global
Economic Policy Systems Simulation:
Monetary
macroeconomic policy Financial
Economics Industrial
Economy
Regional Economy
Investment banking,
Capital Markets Asset Prices,
Global Trade Economics
Breakthrough Innovation in Global Capital Market Equities
Market Research Prices Valuation Models
The only and most reliable structural dynamic deterministic decision
simulators tracking, forecasts months ahead last 20 years global economic,
financial crisis, asset bubble, and daily capital market asset (
interest rate, currency, commodity, equities, stocks, bond futures,
derivatives ) prices market forces mechanism,
avoided trillion dollar market loss and billion dollar supply chain cost due to current probabilistic models
based , speculation over daily economic, business news, technical charting
market momentum based capital market asset prices and risks models ( CAPM ), presented to
24 US, European, China, Taiwan , Asian central bank governors, financial risks
and wealth management , futures, derivatives prices forecasts conferences
and on this website www.osawh.com
tracking daily results , visited by million global government, central banks,
banking, finance, corporate executives universities since 1998.
A. Consumer spending, Fed Fund rate, Dollar exchange rate impact on Dow Jones Index
B. Japan money supply growth, Yen exchange rate, Dow Jones impact on Tokyo Nikkei index
C. EU money supply growth, EURO exchange rate, Dow Jones impact on German DAX index
D. Hong Kong money supply growth, interbank rate, Dow Jones impact on Henseng index have been developed, implemented supporting the following goal,
mission, performance oriented outsourcing strategic centers corporate/
memberships/
workshops
tailored to global government, enterprises, banking, finances enterprises board members, think tank
and executives in integrating into the global markets decision needs:
Goal, mission,
performance oriented OSA teams
developing, implementing ,predicting
unpredictable, unknown futures in global economic, financial, currency, energy crisis, risks government,
banking, finance, enterprises R&D innovation business process review procedures,
methodology, proactive strategic decisions Operations Simulation Analysis,
Forecasting maximize profits and productivity.
Presented by OSA pioneer Dr. Warren
Huang to 100 global government, banking, finance, enterprises technical and
management R&D innovation, global central bank governors , financial
engineering, Basel II risk management, international chemical engineering,
systems control, information management, Molecular, Genetic, Cellular, Biotech, productivity management,
systems control conferences in 47 countries
OSA banking, finance, economics R&D
Innovation Breakthrough in Business Process Reengineering, Finance Products
Innovation, Strategic Risks Change Management Maximize Productivity,
Sustainable Profit, Market Share Growth
offered thousands
lectures to China, Taiwan , US 15 cities TV, Radio 30 million executives, investors,
since 1994,Pubished by Hydrocarbon Processing's
Advanced Control and information management strategy, process design, operations
optimizations Handbook, 1991, 1993,1995,1996, 1997,1999 ,2001, 2003 offered
thousands lectures to China, Taiwan , US 15 cities TV, Radio 30 million
executives, investors, since 1994.
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Hundred
thousands integrated, global structural, dynamics, deterministic proprietary model
simulators supporting
global government
central banks monetary, economic, fiscal, WTO policy impact simulation
strategic decision analysis in R&D innovation
5 Day Global
Interest Rates, Bond Yield, Stock Indices, Currency
Futures, Option Prices Mechanism Simulation , Index, Debt Fund Asset
Allocation Strategy 2005 Forecast Workshop
By Dr. Warren Huang, Pioneer of OSA, website: www.osawh.com
whuang3928@aol.com
OSA Goal, Mission
oriented Problem Solving Technique Structural Dynamic Proactive simulators
tracking simulate, forecasts month ahead the unknown, uncertain futures : Mission Impossible !
OSA pioneer Dr. Warren Huang's over 35 years experiences in the
development, implementation of global banking, finance R&D innovation OSA( Operations Simulation Analysis) in goal mission
, performance control
oriented Problem Solving applied for achieving predicting the unknown, unpredictable in
global banking, financial, currency, energy, asset bubble crisis,
risks for US Mobil, AMOCO, Phillips Petroleum, Bechtel, Bailey network controls, Fluor, Stauffer Chemicals, Taiwan, China, Asian
government, corporate headquarter strategic Technical and business management
R&D centers.
He directed thousands banking, financial market , state and medium, small enterprises consulting, and
universities, teaching, research projects, supporting daily R&D innovation
and implementation decision making analysis
through OSA Goal, Mission oriented Problem Solving Technique: OSA mission
impossible-predicting the unknown, unpredictable, managing risks and uncertainties crisis.
A. Government/business R&D Operations Goal setting, problem scope definition
B Information Knowledge base development : collect full scope (up to last 25 years)
background historical data, information, knowledge, experiences, judgment, theory and
practices
C. OSA modes building: Apply Artificial Intelligence Fuzzy logic, neural net , pattern
recognition to Built thousands structural, dynamic artificial intelligence ,
pattern recognition expert systems based OSA models tracking the causes and response of past history,
lead to
problems solving solutions
D. Real Options real time simulation among the possible solutions to the problem for further model
accuracy tracking improvement and apply for goal , mission, performance mission control,
until problem is solved or meeting your goal
He has lectured over 30 million TV, radio audience in 15 cities China, and Taiwanese, US,
Asian European banking, finance, corporate executives, VIP investors, audiences in global
financial markets asset and wealth management, risk management, corporate reform,
reengineering process improvement supply chain cost reduction ,300,000 Taiwan
importer/exporters 100 countries currency, 5000 products export strategy , life, career,
academics guidance for thousands chemical engineering, global strategic management,
economics, process design, simulation, control senior, graduate students in 12 major
universities in China, Taiwan on OSA for academic, research, career guidance problem
solving, and invited to speak to over 100 international central banks governors,
financial management, chemical engineering, information management, control conference on
monetary policy impact on global financial crisis, risk management. He offered thousand
workshops, on the job training for hundreds thousands global corporate CEO, CFO, senior,
corporate, technical staff, government officers on goal, mission performance oriented OSA
decision analysis guided OSA teams in change management for improved productivity and
profitability.
OSA (Operations Simulations Analysis), pioneered by Dr. Warren Huang , is an
extension of Operations Research, a powerful systematic method for the development and
implementation of problem solving and decision analysis tools, applied extensively by the
US defensive and aerospace industries using artificial intelligence pattern recognition,
filtering and control for the Apollo moon landing tracking in the 1960's. As Dr. Huang applied
it to his first job with Bechtel, in charge of New York office's process computer section
36 years ago. He developed and implemented refinery, petrochemicals, pharmaceuticals
process design and operation simulation systems by integrating the chemical engineering
principle into senior process engineers 20 years design and operating rule of thumb
pattern recognition, human mind reasoning knowledge experiences. These knowledge based
process simulation systems were used for supporting senior engineer's daily design and
plant operating startup, de-bottleneck, trouble shooting, online computer control and also
used for training fresh entry level engineers for US, Taiwan, China, ASEAN manufacturing
process plant design and operation improvement applications for 36 years (Huang,
2-7). He extended this approach to refinery optimization and corporate
investment risk analysis, offshore platform location, and gasoline sales
potential, corporate strategic management simulation applications later at
Mobil's NY as senior analyst. At corporate computer application and management
science department's simulation methods group He applied the moon landing
tracking simulation technique to the nonlinear Kalman adaptive filtering and
stochastic real time control of chemical reactors under uncertain
design, operations and econometric, financial market simulation forecast in his
Ph.D dissertation in 1971. And started Wall Street financial
market simulation and tracking ever since, and started the development of Global Financial
Markets simulation, capital investment, risk management and Global Procurement, Marketing,
Sales Strategic Management and implementation for Taiwan, China and Asian Pacific
government, state and private enterprises daily corporate restructuring, reengineering,
operations improvement applications started 1980 till now (Huang 8-14,
He has developed 32 knowledge based OSA decision supported global strategic
management systems over the last 32 years (including the Global Financial Market Simulation
and Risk Management) which have been recommended by Hydrocarbon Processing's Advanced
Control and information management strategy, process design, operations optimizations
Handbook, 1991, 1993, 1995, 1996, 1997, 1999, 2001,2003 (US Gulf Publishing, Houston)
How is OSA works:
All OSA works have been carried out successfully for global corporate/plant daily restructuring, reengineering, operations improvement problem solving decisions simulators development and implementation by goal and mission, performance oriented OSA teams, Supervised, directed by Huang
OSA applied same approach as Operations Research through repeating four steps:
problem definition, find the goal and scope of the problem (decisions analysis)
Understand the problem :Fact finding, extensive full range operating data history collection (including normal and crisis data) and staff's operating knowledge, develop knowledge based information systems
page 4
Problem Solving decision tools development: develop information knowledge based decision simulators by integrating
fundamental theory into artificial intelligence's fuzzy logic, neural net human mind reasoning, pattern recognition in chaos theory based expert systems decision and perform OSA( Operations Simulation Analysis) All simulation prediction must satisfy error below 1.5 %,
Problem Solving, OSA simulators implementation. Applications of the knowledge based decision simulators for global corporate/plant daily restructuring, reengineering, operations improvement problem solving decisions
Only the Global capital investment and risk management and some Process Plant Operations Management strategy systems , and extension to the molecular and genetic applications to human body biochemical plant design and operations simulation, Disease and aging simulation and Biotech process simulation during the last 14 years. will be demonstrated for corporate restructuring and reengineering applications in this paper due to limited time and space.
32 knowledge based global corporate/plant OSA strategic management decisions simulations systems supported new IT (Information Technology) organization have replaced the inefficient conventional hierachial IT by goal and mission, performance oriented cross-functional pizza pie OSA teams. It helped global refinery, petrochemicals and chemicals, fibers, biotech and financial market daily reengineering, restructuring and operations improvement (change management) information business with easily measured billions dollars cost reductions return through improved global investment, procurement, production decisions. It make IT executives the corporate think tank in corporate restructuring and reengineering applications. These knowledge based goal and mission, performance oriented OSA teams will provide virtual, dynamic IT carousing the corporate and countries boundaries supporting the virtual corporation maximize utilization of global, capital, energy, raw material, information and knowledge resources
Government/Corporate decision support systems:The Model for transforming the IT function
The goal, mission, and performance oriented cross functional Corporate/Plant OSA
teams (equivalent to Strategic Business Units (SBU), have been formed after extensive
operations review, conducted by the author (the program manager) These OSA teams will
assume full responsibility for the development and implement the corporate/plant IT and
integrated into 32 knowledge based operations simulation analysis models for key decisions
makers, supporting corporate president, financial, procurement, marketing production VP,
managers, down to process plant reactors, units operations technical, operating staff
operations daily decision in corporate restructuring, reengineering, downsizing, global
merger/acquisition, strategic alliance, corporate global strategic decisions in crude
oils, feedstock, energy procurement, production, inventory cost reductions, competitive
pricing, sales, market shares strategy, energy conservation , quality control, waste
minimization and DCS/CIM applications. for total quality management cost reductions and
corporate/plant staff on the job decision analysis training to maximize int'l refinery,
petrochemicals, chemicals plant flexibility and productivity in the one year OSA program
directed byDr. Warren Huang
This approach will provide the most efficient and rewarding way for transforming the IT
function
1.Global multinationals corporate/plant restructuring, reengineering, change management operations improvement through cost, quality, market share goal, mission, performance oriented OSA teams develop, implements OSA knowledge based corporate/plant operation decisions simulators supported daily operations saving billions dollars without staff reduction, hardware investment with significantly improved global market shares in one year OSA program
2. Global process plant information integration and decision supports, for debottle-neck, improved quality at reduced raw material, energy unit consumption costs through cost, quality, market share goal, mission, performance oriented OSA teams develop-, implements OSA knowledge based process units operation decisions simulators supported knowledge based model feed forward optimum computer control operations saving millions dollars without staff reduction, hardware investment with significantly improved global market shares in one year OSA program
3. Global Financial markets simulation, risk management for maximize investment return at minimum risks through tracking daily global central bankers monetary policy and it's impact on interest, exchange rate, commodities, raw materials, products demand, prices, corporate earning and stock prices, call/put options, warrant prices simulation in normal and global financial market crisis operations.
4.Biotech applications: Goal & Mission, Performance oriented knowledge based Biotech systems OSA (Operations Simulation Analysis) of genetic and molecular level human body biochemical genetic and environment operations, preventive medicine, Disease, Aging, Therapy, animal tests, clinical trials and conventional, biotech drug process simulation speedup the new drug and therapy by reduce/or eliminate the animal tests and clinical trials and by preventive medicine to help people live longer and healthier , happier life in the 21 century
5. Education's, Research and Training: Goal & Mission, Performance oriented knowledge based OSA teams applications to university teaching and research, IT and corporate/plant excessive on the job training, which I implemented for thousands of senior graduate student in Taiwan and China universities, trained millions global IT, corporate/plant financial executives, investors
Emerging Practices in knowledge management
Thousands of knowledge based decision simulators out of the 32 strategic management systems have been developed, implemented successfully by the author in the last 32 years, Up to billion have been saved without hardware investment and staff reduction. just through the use of these simulators (for the financial markets simulation and feedstock's procurement alone) The results have been published and inviting to speak to 28 countries international conferences..
Additional strategic systems and knowledge-based simulators will be developed and implemented in meeting the future demand.
Development of OSA knowledge based decision simulators:
What is OSA and what OSA has accomplished?
OSA (Operations Simulations Analysis), pioneered by Dr. Warren Huang , is an extension of Operations Research, a powerful systematic method for the development and implementation of problem solving and decision analysis tools, applied extensively by the US defensive and aerospace industries using artificial intelligence pattern recognition, filtering and control for the Apollo moon landing tracking in the 1960's. As Huang applied it to his first job with Bechtel, in charge of New York office's process computer section 32 years ago. He developed and implemented refinery, petrochemicals, pharmaceuticals process design and operation simulation systems by integrating the chemical engineering principle into senior process engineers 20 years design and operating rule of thumb pattern recognition, human mind reasoning knowledge experiences. These knowledge based process simulation systems were used for supporting senior engineer's daily design and plant operating startup, debottle-neck, trouble shooting, online computer control and also used for training fresh entry level engineers for US, Taiwan, China, ASEAN manufacturing process plant design and operation improvement applications for 32 years (Huang, 2-7). He extended this approach to refinery optimization and corporate investment risk analysis, offshore platform location, and gasoline sales potential, corporate strategic management simulation applications later at Mobil's NY as senior analyst. At corporate computer application and management science department's simulation methods group He applied the moon landing tracking simulation technique to the adaptive filtering and control of chemical reactors under uncertain design, operations and econometric, financial market simulation forecast in his pH dissertation in 1972. And started Wall Street financial market simulation and tracking ever since, and started the development of Global Financial Markets simulation, capital investment, risk management and Global Procurement, Marketing, Sales Strategic Management and implementation for Taiwan, China and Asian Pacific government, state and private enterprises daily corporate restructuring, reengineering, operations improvement applications started 1980 till now (Huang 8-14, Jib, 15-17).
He has developed 32 knowledge based OSA decision supported global strategic management systems over the lsat 32 years( including the Global Financial Market Simulation and Risk Management) which have been recommended by Hydrocarbon Processing's Advanced Control and information management strategy, process design, operations optimizations Handbook, 1991, 1993, 1995, 1996, 1997, 2001, 2003 (US Gulf Publishing, Houston) www.osawh.com/hp2001h.html
How is OSA works:
All OSA works have been carried out successfully for global corporate/plant daily restructureing, reengineering, operations improvement problem solving decisions simulators developement and implemention by goal and mission, performence oriented OSA teams, Supervised, directed by Huang
OSA applied same approach as Operations Research through repeating four steps:
problem definition, find the goal and scope of the problem (decisions analysis)
Understand the problem :Fact finding, extensive full range operating data history collection (including normal and crisis data) and staff's operating knowledge, develop knowledge based information systems
page 4
Problem Solving decision tools development: develop information knowledge based decision simulators by integrating
fundamental theory into artificial intelligence's fuzzy logic, neural net human mind reasoning, pattern recognition in chaos theory based expert systems decision and perform OSA( Operations Simulation Analysis) All simulation prediction must satisfy error below 1.5 %,
Problem Solving, OSA simulators implementation. Applications of the knowledge based decision simulators for global corporate/plant daily restructuring, reengineering, operations improvement problem solving decisions
Only the Global capital investment and risk management and some Process Plant Operations Management strategy systems , and extension to the molecular and genetic applications to human body biochemical plant design and operations simulation, Disease and aging simulation and Biotech process simulation during the last 14 years. will be demonstrated for corporate restructuring and reengineering applications in this paper due to limited time and space.
Global Financial Market Simulation, Capital Investment and Risk Management
This knowledge based Global Financial Markets OSA(Operations Simulations Analysis) and Risk Management Systems, simulating daily US and global financial and products market interaction, which pinpoints each economic, financial market crisis beforehand by simulating the global central bankers daily money supply and it's impact on macro economic GNP, inflation, capital flow, and trade economics, commodities, industrial raw materials, products demand and prices, financial economics interest rates, currency exchange rates and corporate operating margins, stocks and bonds, commodities and financial future and derivatives(call/put option, warrants) and real estate properties prices. These simulation, forecasts predicted the global f inancial market normal day to day operations and major crisis since 1987 stock crash with average error below 1.5 %
The global Investors and institutional fund managers could have avioded billion dollars loses by stay out of the markets and or bought put options before the financial crisis and made billion dollars by taking advantage of the investment opportunities during the global crisis .
These knowledge based simulators hyave been developed through applying Artificial Integence neural net, fuzzy logic, chaos algorithms out of last 20 years daily US, Asian, European Wall Street Journals and Taiwan, China, Hong Kong's daily financial markets news papers, trading and corporate earning data and training and feedback from millions chief finance officer, fund managers, traders, investors market pshchology in authors nationwide radio and TV program in Taiwan, and China and integrated into the demand side economic theory by the author's goal and mission, performance oriented OSA teams only the US Fed fund rate, Dow index, IBM stock price and W. Tex crude oil price simulation forecast for US daily financial markets and Korea Won, Seoul stock index, Hong Kong Henseng Index and China SHanghai Stock index for Asian finaincial market crisis simulations are shown in the paper, additional results will be demonstrated in the conference.
Interbank or Fed fund rate are related to Money supply growth rate %,, Commodity index and inflation rate)shown on Fig. 1 These systems explain the US Fed use 4- 6 % M2 money supply growth rate at current inflation rate of 2- 3%, and commodity index 220- 250, the Fed fund rate is in the 4.5 - 6 % , lower inflation rate and commodities prices (benefited by strong dollar and Asian financial crisis resulted economic slowdown, allow the Fed kept current expansionary money supply policy to keep the dollar from rising, which will hurt our export.
Asian Financial Market Currency Crisis Simulation
Dollar exchange rates are related to US trade deficit, the other country's trade surplus(deficit), interest rate spread) While Asian country central bankers must tighten money supply, raised interest rate to stabilize the exchange rate(increse the interest rate spread), The economic boom of most Asuan countries resulted skyrocketing labor and properties and stock prices have cut into the export market competativeness( against China's low labor costs), lead to deteriorating trade and current account deficit in Thailand, Indonesia, Korean, Hong Kong and shrinking trade surplus in Taiwan, made their currency overvalued.. Thailand had to raise to interest rate from 15 % to 30 %, to allow the Baht exchange rate rebound from 50 to 40(depreciated form 25), Hong Kong raised the interbank rate from 5 % to 25 % to allow the Hong Kong dollar stick to the 7.7), S. Korea has to raised the interest from 20 % to 40 % to prevent it drop to 2000(depreciated from 750), lead to rebound and stabilized at 1400. as shown on Fig. 2
However, the US dollar is overvalued at current level(especially against Yen at 135, due to fail to reflect the surging Japan trade surplus,(more than 50 %), while US trade deficit will making new high in the months ahead., the dollar already seen it's peak, will start to fall till April)
The Global Commodities, Industrial raw material and Futures Prices Simulations, Forecasts
Most commodities cash and future are are related to money supply growth( the demand,), the dollar exchange rates, oil prices and inflation rate. Which explain the recent gold prices slump is due to the strong US dollar, lower inflation and the oil prices(production cost)
The current economic slowdown in Asia, caused by credit tightening due to Asian Financial Market Crisis lead to falling oil, petrochemicals raw material and products prices will continue till April. . Take the West Texas crude oil price for example, is due to poor demand in fuel oil (mild winter make it drop to 42 c/gal and lower )and gasoline prices(drop to 45 and lower , simulation result is shown on Fig.3, which indicate the oil price will drop to 14 by April. and rebound then. The lower ethylene price is due to
page 5
lower crude oil price, naphtha price(cost) and strong US dollar even at moderate economic
growth( 5 % M2 growth rate ). The slump in IC DRAM and PC prices are due to strong US
dollar VS Korean Won, Japnese Yen and the technical innovation(short product life)
the falling trend will continue till April. The impact of global economic demand and production cost and dollar exchange rate impact on the these commodity and consumers products prices in the global import and export market are simulated reliably for daily corporate financial and marketing decisions with average error below 1.5% , pinpoint ahead of the trade competetiveness and global financial market crises, before it deteriorates.
Additional prices relationships and simulation results will be demonstrated in the conference.
The Global Commodities and Financial Futures and Derivatives OSA:
The the current and future global central bankers monetary policy impact on global financial interest rate and exchanges rate futures have been simulated and forecast as stated in the previous paragraph.
While it's impact on global stock market indecies are simulated as follows:
Global Stock Index/Bond are related to M2 money supply growth, interest rate, dollar exchange rate)
This relationship simulated last 15 years 20 daily international stock market stock indices, including normal and major crisis with average error below 1.5 %
the London FInancial Times Index is related to UK M2 money supply growth, interest rate, NY Dow Jones Index It predicted 1987, The high US inflation rate (6.5% ) and the Iranian war, pushed the oil price to 25, lead US Fed credit tightening, reduce the money supply growth from 9 % to 7 %,, raised the Fed fund rate from 9 % to 9.75%, the Dollare Yen exchange rate drop from 150 to 136, caused the Dow crashed from 2250 to 1520 ,as shown in Fig 4.. It also indicate the current Dow recovery from 500 plunge is due to lower inflation(due to Asian economic slowdown) lead to lower mortgage rate and full employment, expansionary money supply(Fed rate will be below 5.4%, m2 money supply will be over 5.5 % to partial offset the overvalued dollar( negative impact on auto, IC, computers imports from Japan and Korea) and economic slowdown in Asia will cut into corporate profits.
It will take the Dow to retest it's 7000 lows,while Financial Times Index will follow Dow Jones to retest 4800 .
The financial futures and derivatives (put/call options) have been simulated accurately as follows
The above commodities, interest rate, exchange rate and stock index simulations have been extended easily to the futures simulation and forecast by replacing the current value by the future value. while their call/put options have been used extensively by the financial industry for hedging in risk management have been simulated:
Call/Put options prices are related to the striking price of the call/put, Days to expiration, current and future coommodities, interest rate, exchange rate and stock index prices
This formula is simpler than the Nobel wining Black formula, it provide future commodities interest rate, exchange rate and stock index simulation , forecasts and does not require volatility data. It have been developed, used successfully since 1987 stock market crash.
Asian Stock Market Crisis Simulations:
The ASEAN Currency crash has spilled over to Japan, Korean , due to mounting trading and current deficit, the credit tighening in support the currency(especially Hong Kong raise the interest rate to stick to the dollar)caused their stock index plunged more than 50 % , While Japan is badly hurt due to heavily invested in Asia.
Fig. 5 shown HK Henseng Index plunged more than 50 % to 8300 due to interbank rate pushed up to 25 %(to support HK dollar) and while China Shanghai Stock Index down 30 % from it's top, US DOW JONES softness, While Korea's Seoul Index crashed 50 % due to Won exchange rate plunged from 800 to 2000, interest rate hike to 30 % as shownChina's Shanghai Stock index are related to China m2 money supply growth %, HK Henseng Index, China Inflation rate)which indicated , the index is off 30 % from it's peak to 1100, due to m2 money supply growth is down 50 % to 14 % and Henseng index plunged 50 %, the index is supported at 1000 by the low inflation rate of 2 %, lead recent interest rate cut). This formula, jointly developed by Huang and imlplmented by Ji, have tracked last four years daily stocks movement with average error below 1.5 %, Huang have been invited to speak to the Beijin's Central Braodcasting station, Shanghai, Wuhan, Shenzhen, 12 cities nationawide 200 million audiences and television viewers and used it for nationawide corporate finance, government officials and institution managers, traders,investors investment strategy and risk management training program.
Global corporate earning, profit margin, daily stock prices, call/put options , warrant prices simulation
Equiped with the above global financial markets and commodities, products demand and prices simulations, we can easily tracking, simulate global central banks monetary supply policy, it's impact on global macro, financial, trade, and industrial raw, material, products prices, and therefore the corporate capital expenditures, merger/acquisition and the profit margin, stock prices. These systems have been applied successfully to thousand of US, Taiwan, Japan, Taiwan, Hong Kong, China's corporate profit margin and stock prices simulation since the 1987 stock crash.
Corporate Profit Margin are related to operating costs(raw material, energy, manpower,financial), sales)
Corporate Stock Prices are related to Global economy, profit margin or Stock index,
page 6
Take IBM for instance, it's profit margin and stock price is very much depend on US economy(Dow Jones Index), especially the money supply growth.. and the Fed fund rate, while the Japan's Yen exchange rate profit the major
competitors, and sales prices and conversion loss or gain) we. can easily visualize, shown IBM suffered huge loss and stock prices hit 40 as the US money supply growth dip below 0.5 % , Fed fund hit 10 %, during the recent recesion,It started rebound with the M2 rebound above 1 % and falling fund rate and weaker dollar, Yen (reach 80)It also indicate that IBM stock price pushed to 160 and profit margin soaring as IBM benefited by it's cost reduction, technical innovation cost reduction in mainframe and the global economic expansion, with m2 growth rate reaching 5.5 % the current Dow is at all time high and recovery from 500 plunge is due to lower inflation(due to Asian economic slowdown) lead to lower mortgage rate and full employment, expansionary money supply(Fed rate will be below 5.4%, m2 money supply will be over 5.5 % to partial offset the overvalued dollar( negative impact on auto, IC, computers imports from Japan and Korea) and economic slowdown in Asia will cut into corporate profits.Which will take IBM retest it's recent low of 88 in the month ahead. While the IBM put/call options , warrant have been simulated accurately as follows
IBM Stock price = F (US M2 money supply growth, interest rate, dollar exchange rate)
IBM put/call/warrant prices= F(Striking prices, days to expiration, IBM current/future stock prices),
Huang used this formula bought US$ 2000 IBM, Monsanto, Lily put two weeks before the 1987 Oct crash at 1/8 to 1/16 prices, it soared 50 times on the expiration day as the stock crashed, the investment went to US 100,000.
Additional prices relationships and simulation results will be demonstrated in the conference.
Corporate Restructuring, reengineering, change management OSA Decision Supports
The exploding management information provided by the low cost and easily acessable computing and information industry make it impossible for daily decision making.
The author have applied the corporate/plant decision operations simulations successfully to assist the US, Taiwan, Asian Pacific refinery, petrochemicals, chemicals industries corporate decision makers in corporate restructuring and reengineering daily decision support during the last 32 years. Billions dollars can be saved with improved operating flexibility and productivity and global market share through applying the Operations Simualtion Analysis(OSA) based global corporate/plant strategic management systems for global corporate/plant restructuring and reengineering applications
Dr. Warren Huang applied it to the developement and implementation of Over 100 refinery, olefin,plastics, fibers, biotech process reactors systems design/operations improvement systems , directing 1000 chemical engineering senior and graduate students process design, operations simulation and control through goal and mission oriented OSA teams during the author 's university teaching and research for Taiwan's top universities and extended to China's major universities in Shanghai and Beijin. These sysstems have been used for thousands process plant managers, senior technical, operating staff, reactors systems operating staff, corporate planning VP, managers on the job training and decision support in corporate reengineering applications improvement experience with major US, Taiwan,China, Asian Pacific companies. Millions of dollars could be saved
A. 3-5% Reactors yields improvement, up to 150 % of design capacity debottleneck,
B. New Process, Product developement, quality improvement and control.
C. Up to 50 % Energy conservation waste minimization, ,
D .Lab scale, pilot plant scaleup, reduced clinical trial, pilot experiments for yield and quality improvement all achieved without any equipment retrofit and plant shutdown.
These 100 process simulations systems are integraed into the author's global strategic management systems described earlier will provide full scale decision support for global corporate/plant restructuring, reengineering decision supports
Table 1 shown the oil hydrocracking and olefin corporate/plant reengeineering systems developement and applications.
recommended by Hydrocarbo Processing's (Gulf Publishing, Houston)1997 advanced control and information systems handbook
Biotech Applications:'" Human Body Biochemical Plant Design and Operations Simulation"
Dr. Huang has 32 years successful knowledge based online refinery, petrochemicals process plant OSA(Operations Simulation Analysis) and optimum computer control to provide optimum feedfoward setpoint control for improved plant operating quality, efficiency and plant life at reduced cost and accident, interruptions and reduced damage due to feedback control, without any laboratory or pilot plant tests, or equipment retrofit through OSA guided improved operating guideline and preventive maintenance.
He has extended this experience to human body biochemical plant design and operations simulation(OSA) andpharmaceutical products process simulations 14 years ago. directed over 300 senior chemical engineering and biochem senior and graduate students to conduct intensive search of global biotech literature, patents(including Chinese herbs)on cell developement, genetic and molecular biology,immunology, cancer and virus caused major disease, and developed drugs process design simulation for 30 biotech drug process (from conventional penicillin, L-Lysine to Monoclonal antibody, interferon, to recobinant DNA)
Each person has his unique biochemical plant, geneticaly inherited(design) and responding differently to the outside environemental impact; pollutions, educations, working and emotional stress(operations). Even the idnetical twin, will be differents if raised in different environment, as it is compared to tow identical designed
page 7
chemical plant behave differently if it is running under different feed composition, or different climate. .Alll can be tracked by real time OSA. Process plant central , auxiliary computer control and regulartory control systems is used to simulation CNS(centrol Nervous control)Nervous systems control,PNS(Periphiral nervous systems and Hormones self regulartory control to a preseted setpoint for feedback temperature control, water, chemical , energy balance, storage and self defence, emotional response. while brain memory function compare to computer memory and programs.
The computer control systems consists of sensors and signals are sending through currents, as compared to brain receive the senors signal from tongue, eyes, nose, and skins and send the response through neurons send it through electrolyte neural transmitters in the spinal cord (cable wire) and the recetpors
while the local hormone regulars sending chemical signals through relay and enzyme catalytic reactions amplified by second messengers and protein kinase to regulate the control of reproduction and developement. and interact with the CNS. and plays key role in water, chemical balance and emotional, mood and organ functions. Again, by applying the process plant optimum feedforward set point control can reduce body organ, tissue damage due to offset in feedback control . In which modification of the setpoint due to inherited habit (genetic deffect or mutation, )is required to change the bad habit through preventive medicine or health food to tune up the body system.
With Vera's assistance These biochemical plant is able to siumulate the actions at the genetic and moelcular level real time human body biochemical plant Design and Operations Siumlation will help speedup the new drugs developement by reduce or hopefully eventually eliminate animal tests and clinical trials.
'" Human Disease, Aging, Therapy Operations Simulation"
The achievement of genetic and molecular biology in modern biotech has brought human body biochemical plant even closer to refinery, petrochemicals process plant design and operations .Warren's successful direct application of knowledge based online refinery, petrochemicals process plant OSA (Operations Simulation Analysis) and computer control to improve plant operating efficiency and plant life at reduced accident, interruptions without any laboratory or pilot plant tests, or equipment retrofit through OSA guided improved operating guideline and preventive maintenance.
With the help from our genetic and molecular level simulation of CNS, PNS and Hormones integrated control of organs and tissues functions , which dominate our health, longivity, and disease.
Diseases and Aging can easily be identified through the malfunction of the systems by real time tracking and simulation of these central and regulatory control systems Which can be caused by inherited genetic deffect ,or damaged by environemntal polluted chemicals free readical attack resulted uncogene trickled cancer or virus infection, damaged immune systems, or is caused by scrapie prion turn on to destroy the neurons resulted spongy form. Knowledge based Operations Simulation Analysis of Disease, aging and therapy again save time wasted in clinical trials, animal test. The recent breakthrough in gene therapy by direct injection of tumor suppresor genes and antisense,bombard it with activated Iodine on monoclonal antibody to destroy the cancer cells in 24 hours.,without any clinical trial or animal tests,. which already copy the OSA online process plant trooubleshooting; solve the plant operating problem instantly without interruption
With the help from human genome projects, which identifiy DNA sequences of the known disease provide OSA tracking and simulation of the genetic and molecular level enzyme catalyzed organic sythesis reactions surrounding the real cause of human Diseases and Aging, and the therapeutic mechanism very valuable information resources for the effective cure, therapy of aging and major disease
The first step in building knowledge based human disease, aging, therapy OSA systems is to form goal, mission, performance oriented cross-functional OSA teams, then start the collection of entire medical history, pathology, pathgenic data, therapeutic and clinical trials history and the specialsts experiences from various cell developement,genetics, immunology, pathologist, and MD's and bulid up the knowledge based human disease, aging, therapy information systems, knowledge based OSA decisions simulators can then be developed to identify the real cause and curing therapy approach for the disease and aging and prevention directly, hopefully without goning through animal tests and or clinical trials
This approach can easily applied to the simulation of animal tests or clinical trial, like the prion related disease
simulation in mouse and human brain simutaneously to identify the real cause and way to cure it.
Conclusions :Educations, Resaerch and Training : The New IT executives for the next century
In survising in this rapidly changing global markets, both the IT excutive, academic training and the corporate/plant executives and each employee must be trained daily by these knowledge based decisions simulators(updated regularly, to adpative and responding to the changing environment to be competitive. while this goal & mission, performance oriented knowledge based OSA teams applications to university teaching and research, IT and corporate/plant excutive on the job training, which the author implemented for thousands of senior graduate student ini Taiwan and China universities, trained millions global IT, corporate/plant financial excutives, investors
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References :
1.Huang,W."Improve process by OSA", Hydrocarbon Processing, May 1980
2.Huang,W.,"OSA for Int'l Petrochemical Marketing and Sales", Presented to AIChE Diamond Jubilee Meeting
1 Huang,W."Integrated Refinery/Petrochemicals Management Information & Strategic Management System-Refinery
of the 1990's",presented to INTERPEC CHINA SEPT 10,1991,Beijing,China.
2 Huang W. " Strategic Planning Expert System", Advanced Control Handbook VI,Hydrocarbon Processing,SEPT 1991.
4 Huang W." Computer Integrated Plant Management", Advanced Control Handbook VI, HP, Sept. 1991, p. 59
5 Huang W. "Refinery Optimization and and Control", presented to INTERPEC China 91, Beijing, Sept. 12,1991.
6. Huang,W." Decision Supported Refinery CIM', Advanced Control Handbook Hydrocarbon Processing, Sept,1992, 1993
7. Huang, W. "Operations Simulation Maximize Refinery, Olefin Plant Productivity, Flexibility", Oct. 12, 1991, Oct. 6, 1995 Antwerpan, Belgium Large Chemical Plant conf. by European Chemical Engineering
11.Huang, W. " Operations Simulations Decisions Supported TQM Maximize Productivity and Flexibility" to Quality and Productivity Conf by Hydrocarbon Processing ,Feb, 25, 1993, Houston,
12. Huang, W. "Operations Simulation Supported Reengineering Maximize Refinery and Chemical Plant Productivity and Flexibility", May 20,. , 1995,Beijin, China. byAchemAsia
13Huang,W.,"OSA Maximize Styrene Productivity, Flexibility, OGJ.Mar.1983.
14 Huang,W "Energy and Resource Conservation in Chemical Process Design & Operation",World Congress III,
Tokyo,Oct.1,1986
15.Huang,W.,"Financial and Macroeconomic Impact on Int'l Petrochemical prices,demand,Trade",to World
Congress III,Oct. 1986,Tokyo.
16.Huang,W.,"OSA based eduction and on the job training",to World Congress III,Oct. 1986,Tokyo.
17.Huang,W."International Petrochemicals Management Information System Structure and Operating Goals", to
AIChE, Mar.19, 1990, Orlando.
18Huang,W.,"OSA expert systems based training simulators",to World Congress IV, KArsrule, Germany, Sept. 1991
19Huang, W. " Operations Simulations Decisions Supported TQM Maximize Productivity and Flexibility" to Quality and Productivity Conf by Hydrocarbon Processing ,Feb, 25, 1993, Houston,
20 Xiao Min Ji, Huang, W. "Operations Simulation Supported Reengineering Maximize Corporate Productivity and Flexibility",Presented to World Econmic Management Conf. July 20 , 1997,Shanghai, China.
21.Xiao Min Ji, Huang, W. "OSA supported Global Strategic Management",Presented to World Economic Management Conf. July 20, 1997, Shanghai, China.
22.Xiao Min Ji, Huang, W. "Asian Financial Crisis Simulation and Risk Management",to be presented to Economic Simulation Conf. July 20 , 1998 Lyon University, Lyon, France,.
23Huang,W" OSA/DSA Approach to Biotech and Recombinant DNA",- int'l Biotech Conference, Sept. 1985, Singapore
24Huang,W" OSA/DSA Approach to Chemicals and Biotech Reactors", to ACHEMA, Sept. 1991, Frankfurt, Germany.
25 Huang ,W"OSA models based Expert Systems", to ISA 1992,Houston
26Huang,W" Human Body Biochemical Plant Design, Operations Simulation",- Biotech Simulation Conf, July, 1998, Lyon, France
27Huang,W" Human Body Aging, Disease, Therapy Operations Simulation",- Biotech Simulation Conf, July, 1998, Lyon, France
Published on Sept. 1997 , 1999 Hydrocarbon Processing Advanced Control and
Information Systems Handbook
Dr. Warren Huang additonal refernece 1998-2000
( US Gulf Publishing, Houston)
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