To formulate is to come up with a plan. If you are locked out of your house, you'll need to formulate a plan to get back inside — preferably one that doesn't involve kicking in the door.
You can also use the verb formulate to mean "put into words." If too many people are showing up at your work in inappropriate clothes, your company may formulate a dress code policy. They may, for example, decree that either socks or shoes must be worn. The verb can also mean to develop a formula for something. If the dog ate the chicken you were going to use in your dinner, you may need to formulate a new recipe for chicken-less pot pie.