A methodology for optimizing the operation of heating/cooling plants with multi-heat-source equipments is proposed. The methodology decides the optimal combination of the running machines to minimize the energy consumption of a heating/cooling plant. The energy consumption, energy cost and carbon dioxide emission are simulated using a tool developed in the MATLAB (R) Simulink (R) environment, embedded with a module developed using MATLAB (R) Stateflow (R) that can automatically decide the on/off states of heat source machines corresponding to cooling and heating loads and an operational priority order of heat source machines. A case study is introduced to demonstrate the methodology, which is an actual heating/cooling plant located in Osaka, Japan. The plant consists of two absorption chiller/heaters, one centrifugal chiller, one ice chiller, and two air-source heat pumps. The proposed methodology is used to simulate the plant performance at six different operational priority orders of heat source machines. The best operational combination can reduce primary energy consumption by 19.7%. energy cost by 12.8%, and carbon dioxide emission by 29.6%, compared to present operation. (C) 2008 Elsevier B.V. All rights reserved.