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02a Facilities Planning February 2017
02a Facilities Planning February 2017
02a Facilities Planning February 2017
Prepared by:
Industrial Systems Engineering Research Group
Universiti Tun Hussein Onn Malaysia
Learning Outcomes
Structural Design
Facilities
Planning
Facilities Design Layout Design
2. Plot the total-cost lines for all location alternatives on the same
graph.
- Fixed costs are constant for the range of probable output.
- Variable costs are linear for the range of probable output.
- The required level of output can be estimated.
- Only one product is involve
3. Determine which location will have the lowest total cost for the
expected level of output.
1600
D $600,000 $1,200,000
1400
1200
1000
800
600
400
200
0
2 4 6 8 10 12 14 16 18 20 22
1600
D $600,000 $1,200,000 A
(20, 1390)
1400
(20, 1200) D
1200 (20, 1060) B
C
1000
(20, 980)
800
600
400
200
0
2 4 6 8 10 12 14 16 18 20 22
1600
D $600,000 $1,200,000 A
(20, 1390)
1400
(20, 1200) D
1200 (20, 1060) B
C
1000
(20, 980)
800
600
Break-even
400
point
200
A best
0
2 4 6 8 10 12 14 16 18 20 22
1600
D $600,000 $1,200,000 A
(20, 1390)
1400
(20, 1200) D
1200 (20, 1060) B
C
1000
(20, 980)
800 Break-even point
600
Break-even
400
point
200
A best B best
0
2 4 6 8 10 12 14 16 18 20 22
6.25 14.3
Saturday, September 23, 2017 Q (thousands ofEngineering
Industrial units) 20
Example 10.3
Community
Fixed Costs
per Year
Total Costs
(Fixed + Variable) Location
A
B
$150,000
$300,000
$1,390,000
$1,060,000 Break-Even Analysis
C $500,000 $ 980,000
Annual cost (thousands of dollars)
1600
D $600,000 $1,200,000 A
(20, 1390)
1400
(20, 1200) D
1200 (20, 1060) B
C
1000
(20, 980)
800 Break-even point
600
Break-even
400
point
200
A best B best C best
0
2 4 6 8 10 12 14 16 18 20 22
6.25 14.3
Saturday, September 23, 2017 Q (thousands ofEngineering
Industrial units) 21
Example 10.3
Location
Break-Even Analysis
Annual cost (thousands of dollars)
1600 A
(20, 1390)
1400
(20, 1200) D
1200 (20, 1060) B
C
1000
(20, 980)
800 Break-even point
600
Break-even
400
point
200
A best B best C best
0
2 4 6 8 10 12 14 16 18 20 22
6.25 14.3
Saturday, September 23, 2017 Q (thousands ofEngineering
Industrial units) 22
Figure 10.2
Location
Break-Even Analysis
Annual cost (thousands of dollars)
1600 A
(20, 1390)
1400
(20, 1200) D
1200 Break-Even Quantities
(20, 1060) B
C
1000
(A) (B)
(20, 980)
800 $150,000 + $62Q Break-even
= $300,000 + $38Q
point
600 Q = 6,250 units
Break-even
400 (B) (C)
point
200 $300,000 + $38Q = $500,000 + $24Q
A best B best C best units
Q = 14,286
0
2 4 6 8 10 12 14 16 18 20 22
6.25 14.3
Saturday, September 23, 2017 Q (thousands ofEngineering
Industrial units) 23
Example 10.3
Location Minisum Analysis
When to use?
When locating a NEW facility
by minimizing weighted sum of rectilinear distances from
the new facility to existing operation activities
Example
to determine location of photocopy machine in office.
to open medical clinic / shopping center in new area.
to build main factory to replace several small workshops in
different areas.
Minisum Formula
Arrange from
lowest value to
highest value (ai)
Median = wi
2
= 25 = 12.5
2
Pi ai wi wj
M1 1 5 5
M3 2 2 7
M4 4 4 11<12.5
M2 5 6 17>12.5
M5 8 8 25
x* = 5
Saturday, September 23, 2017 Industrial Engineering 29
Coordinate-Y (bi).
Pi bi wi wj
M1 1 5 5
M2 2 6 11 < 12.5
M4 4 4 15 > 12.5
M5 6 8 23
M3 8 2 25
y* = 4
Saturday, September 23, 2017 Industrial Engineering 30
Minisum model
Decision
[ x* , y* ] = [ 5 , 4 ]
Demand 3 Supply 3
Supply 2 Demand 4
4 7 7 1 100
1 0
100
Factory
Factory 2 can
2
12 3 8 8 200 supply 200
90 110 0 units per period
3
8 10 16 5 150
80 10 60 0 Total supply
80 90 120 160 450 capacity per
Demand 0 0 0 0 period
450
Demand from
Warehouse Total demand
per period
Saturday, September 23, 2017 Industrial Engineering 35
Setting up the Initial Table
Create a row for each plant and a column for each warehouse
Warehouse
Plant
1 2 3
Phoenix
Atlanta
Warehouse
Plant Capacity
W1 W2 W3
900
Requirements 200 400 300 900
Warehouse
Plant Capacity
1 2 3
$5.00 $6.00 $5.40
Phoenix 400
900
Requirements 200 400 300 900
Warehouse
Plant Capacity
1 2 3
$5.00 $6.00 $5.40
Phoenix 400
Warehouse
Plant Capacity
1 2 3
$5.00 $6.00 $5.40 400
Phoenix (200)
200
$7.00 $4.60 $6.60 500
Atlanta
400 (100)
Warehouse
Plant Capacity
1 2 3
$5.00 $6.00 $5.40 400
Phoenix (200)(0)
200 200
$7.00 $4.60 $6.60 500
Atlanta
400 (100)
Warehouse
Plant Capacity
1 2 3
$5.00 $6.00 $5.40 400
Phoenix (200)(0)
200 200
$7.00 $4.60 $6.60 500
Atlanta
400 100 (100)(0)
Accidents
The introduction of new
products or services
Morale problems
Changes in methods
and equipment
Process layout
Able to handle variety process requirements
23/09/2017 54
Product Layout (sequential)
Raw materials
or customer
23/09/2017 55
Advantages of Product Layout
High volume production (high prodn rate)
Low cost per unit product
Low cost in material handling
High utilization of labour-equipment
Labour specialization (specific works)
Established routing and scheduling
Repetitive jobs
Low skill workers may not maintain quality of
output (impair quality)
Not flexible to change in volume.
Impair output rate when breakdown (shutdown)
Preventive maintenance is critical.
Nature of product:
Weight
Size
Bulk
In 1 2 3 4
Workers
Out 10 9 8 7
Figure 6.6
Saturday, September 23, 2017 Industrial Engineering 64
Cellular Layouts
Cellular Production
Layout in which machines are
grouped into a cell that can process
items that have similar processing
requirements
Group Technology
The grouping into part families of
items with similar design or
manufacturing characteristics
Saturday, September 23, 2017 Industrial Engineering 65
Functional vs. Cellular Layouts
Conveyor
Truck