The authors set up a mathematical model combining the network flow model with the multiple objective decision making by means of system engineering. To apply this mathematical model the authors compute and analyse the existing available data. As a result, a scientific appraisal of the coalyards is made and some feasible plans to improve the location and management of the Shanghai's coalyards are formulated. The plans migth serve as a great impetus to the research work of the optimal layout of coalyards in the big city.