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Facility Location and Layout
Facility Location and Layout
Facility Location and Layout
LAYOUT
Prepared by ,
Guided By,
Piyush bhatt
Madhuri mam
Swati parmar
Dipak mer
Submitted to,
Department Of Business Administration,
MK Bhavnagar University,
Bhavnagar.
PLANT LOCATION
Every entrepreneur is faced with the problem of deciding
the best site for location of his plant or factory.
Plant location refers to the choice of region and the
selection of a particular site for setting up a business or
factory.
An ideal location is one where the cost of the product is
kept to minimum, with a large market share, the least risk
and the maximum social gain.
Location analysis
Demographic Analysis
Trade Area Analysis
Competitive Analysis
Traffic analysis
Site economics
Site- A (Rs)
Site- B (Rs)
Land and
Buildings
350000
250000
Transport
facilities
20000
30000
Taxes
10000
8000
Labour
100000
70000
Water, power
and fuel
10000
80000
Total
490000
438000
Cost of
establishments:
Cost of
operations:
required
for
Uncontrollable factors
1. Government policy
2. Climate conditions
3. Supporting industries and services
4. Community and labour attitudes
LOCATION MODELS
Various models are available which help to identify the ideal
location. Some of the popular models are:
1. Factor rating method
2. Weighted factor rating method
3. Load-distance method
4. Centre of gravity method
5. Break even analysis
Location factor
Factor
rating
Rating
Location
1
Location
2
Facility utilization
Employee preferences
SOLUTION:
Sl. No.
Location
factor
Factor rating
(1)
Location 1
Location 2
Rating
Total
Rating
Total
Facility
utilization
24
40
20
15
Employee
preferences
25
15
Total
69
Total
70
Location factor
Weight
Scores
L-1
L-2
Facility utilization
25
25
25
15
Employee preferences
10
SOLUTION:
The weighted score for this particular site is calculated
by multiplying each factors weight by its score and adding
the results:
Weighed score location 1 = 25 3 + 25 4 + 25 3 + 15 1 +
10 5
= 75 + 100 + 75 + 15 + 50 = 315
Weighed score location 2 = 25 5 + 25 3 + 25 3 + 15 2 +
10 3
= 125 + 75 + 75 + 30 + 30 = 335
Location 2 is the best site based on total weighted scores.
3. Load-distance Method
The load-distance method is a mathematical model used
to evaluate locations based on proximity factors. The
objective is to select a location that minimizes the total
weighted loads moving into and out of the facility. The
distance between two points is expressed by assigning the
points to grid coordinates on a map. An alternative approach
is to use time rather than distance.
4 Centre of Gravity
Centre of gravity is based primarily on cost
considerations. This method can be used to assist
managers in balancing cost and service objectives. The
centre of gravity method takes into account the locations of
plants and markets, the volume of goods moved, and
transportation costs in arriving at the best location for a
single intermediate warehouse.
PLANT LAYOUT
Point to consider
1.
1.
2.
2.
3.
3.
4.
4.
Meaning
Objectives of Plant Layout
Principles of Plant Layout
Classification of layout
4.Classification of layout
Layouts can be classified into the following
five categories:
1. Process layout
2. Product layout
3. Combination layout
4. Fixed position layout
1. Process Layout
Model of process Layout
Advantages of process
Layout
Flexibility
better utilization of production facility
Lower investment
Increase knowledge of supervisors
2. Product Layout
Model of product Lay-out
Advantages of product
Layout
3. Combination Layout
combination
type of layout for manufacturing different sized gears