Facilities Layout and Location

The three most important criteria in locating a

factory: Location! Location! Location!
 Supply Chain Homework Formulation

Xi,j = amount of raw natural gas sent from field i to plant j 106 ft3 , i = A,B,C,D,F;
j = F,G,H,I

Yjkl = 106 ft3 finished gas product k produced at plant j and sent to customer l; l
= J,K,L,M,N,O

Pk production cost of gas k; $/106 ft3

Ti,j = delivery cost by pipeline from field i to plant j; $/106 ft3

Tjl = delivery cost by truck from plant j to customer l; $/106

Dij = distance of pipeline from field i to plant j; miles

Djl = distance of road from plant j to customer l; miles

Ajk = amount of product k produced at plant j as a fraction of one unit of raw

natural gas
 Supply Chain Homework Formulation

min  T X   T
i j
ij ij
j k l
jl  P  Y jkl
k

subject to:
X
j
ij  Si (field capacity)

X
i
ij  R j (plant capacity)

 A
i j
jk X ij   Y jkl (for each k)
j l

Y
j
jkl  Dkl (customer l demands for gas k )
 Facilities Layout Techniques Applied to:

 Hospitals
 Warehouses
 Schools
 Offices
 Workstations
 e.g. offices cubicles or manufacturing cells
 Banks
 Shopping centers
 Airports
 Factories
 Objectives of a Facility Layout
Problem

 Minimize investment in new equipment

 Minimize production time
 Utilize space most efficiently
 Provide worker convenience and safety
 Maintain a flexible arrangement
 Minimize material handling costs
 Facilitate manufacture
 Facilitate organizational structure
 Types of Layouts
 Fixed Position Layouts – suitable for large items such
as airplanes.
 Product Layouts – work centers are organized around
the operations needed to produce a product.
 Process Layouts – grouping similar machines that have
similar functions.
 Group Technology Layouts – layouts based on the
needs of part families.
Fixed Position Layout
Product layout
Process layout
Group Technology Layout
 Computerized Layout Techniques
 CRAFT. An improvement technique that requires the user to
specify an initial layout. Improves materials handling costs by
considering pair-wise interchange of departments.
 COFAD. Similar to CRAFT, but also includes consideration of
the type of materials handling system.
 ALDEP. Construction routine (does not require user to specify
an initial layout). Uses REL chart information.
 CORELAP. Similar to ALDEP, but uses more careful selection
criteria for initial choosing the initial department
 PLANET. Construction routine that utilizes user specified
priority ratings.
 Activity Relationship Chart

The desirability of
locating pairs of Reason code:
operations near each 1 - Flow of material
other: 2 - Ease of supervision
A – absolutely necessary 3 - Common personnel
E – especially important 4 - Contact necessary
I – important 5 - Convenience
O – ordinary importance
U – unimportant
X - undesirable
 Activity Relationship Chart
Offices
E/4
Floor manager
I/5
O/5 I/1
Conference room U U
U U U
Post office U I/2 U
O U I/2 U
Parts shipment E U U
E/1 U U
Repair & Servicing I/1 U
E E/1
Receiving U
A/1
Inspection
 Assembly Layout
 n assembly areas to be located on the factory
floor in m possible locations (m  n)
 Minimize material handling requirements
 Material handling is from the receiving (raw
material) to each assembly area
 and from each assembly area to shipping

Shipping
Receiving

assembly locations

The Factory Floor

 The Cost Coefficients

ei,1 = trips per day from assembly area i to receiving

ei,2 = trips per day from assembly area i to shipping
dj,1 = distance in feet from location j to receiving
dj,2 = distance in feet from location j to shipping

ci,j = cost per day for assembly area i to be located in location j

ci,j = ei,1dj,1 + ei,2dj,2
 An Optimization Model

Let Xi,j = 1 if assembly area i is at location j; 0 otherwise

n n
Min z   cij xij
i 1 j 1
n
s.t. x
i 1
ij 1 j  1, 2,..., n
n

x
j 1
ij 1 i  1, 2,..., m
Discrete Location Assignment Problem
Location
Assembly A B C D
1 94 13 62 71
2 62 19 84 96
3 75 88 18 80
4 11 M 81 21
materials handling costs 1–B
2–A
3–C
4–D
costs = $114
 Locate M new facilities among N
potential sites with k existing facilities
A (k x N) B (k x M)
new sites new facilities
F G H I j k
A 1 3 5 A 4 2 2
existing B 2 3 4 existing B 3 2 1
facilties C 4 5 6 facilties C 6 4 7
D 3 1 2 D 2 1 4
E 5 2 3 E 7 8 9
distance in miles trips per day

C (N x M)
new facilties
C = At B i j k
F 75 67 89
Facility i located at site F: new sites G 67 49 66
C11 = (1)(4) + (2)(3) + (4)(6) H 93 68 91
+ (3)(2) + (5)(7) = 75
 From-to Chart (distances in feet)

To saws milling punch drills lathes sanders

From press
saws 18 40 30 65 24
milling 18 38 75 16 30
punch 40 38 22 38 12
press
drills 30 75 22 50 46
lathes 65 16 38 50 60
sanders 24 30 12 46 60
 From-to Chart - trips per day
To saws milling punch drills lathes sanders
From press
saws 43 26 14 40
milling 75 60 23
punch 45 16
press
drills 22 28
lathes 45 30 60
sanders 12
 From-to Chart - Cost per day ($)
To saws milling punch drills lathes sanders
From press
saws 154.8 208 84 520
milling 570 900 138
punch 342 38.4
press
drills 330 280
lathes 144 300 720
sanders 72

Cost per day = cost per foot x distance in feet x trips per day
 Quadratic Assignment Problem
Problem: Place each of n facilities in one of n locations where
work-in-process moves among the facilities
n! possible solutions.
Facilities
Plant Layout Lathe shop
drilling
sanding
rough polishing
finishing
inspection
galvanizing
paint shop
packaging
quality control
raw material storage
finished goods storage
assembly
cell 1
cell 2
cell 3
 Quadratic Assignment Problem
let ci,j,k,l = the “cost” of placing machine i in location k and machine j
in location l ci,j,k,l = fi,j dk,l
where fi,j = the number of trips per day between machine i to machine j
dk,l = the distance in feet between location k and location l
let xi,k = 1 if facility i is placed in location k; 0 otherwise
let xj,l = 1 if facility j is placed in location l; 0 otherwise

Min z      ci , j ,k ,l xi ,k x j ,l
i k j l

subj to: x i
i ,k  1, k  1,2,..., n

x k
i ,k  1, i  1,2,..., n
 locations
E F G H
facilities Location
A 3 1 5 E
fi,j B 20 4 6 F dk,l E F G H Cost
C 10 14 7 G A B C D 297
D 12 8 9 H
A B C D

A B C D
A: 20(3) + 10(1) + 12(5) = 130
B: 14(4) + 8(6) = 104
C: 9(7) = 63
total = 297
 Location
locations E F G H Cost
E F G H A B C D 297
A 3 1 5 E
facilities B 20 4 6 F dk,l B A C D 289
fi,j C 10 14 7 G A B D C 301
D 12 8 9 H D B C A 339
A B C D A C B D 276
C B A D 309
Best pairwise exchange: From baseline A D C B 328
solution, compute all possible interchanges.
Select the best one; then repeat until no Location
further improvement is obtained. E F G H Cost
A C B D 276

n
( ) paired
2
exchanges
C A
D C
B D
B A
297
351
A C D B 318
A D B C 290
B C A D 280
Any Improvement Heuristic: From baseline
solution, interchange pairs until an improve-
ment is obtained. Then repeat until all pairs
have been found with no further improvement.

Location
E F G H Cost
A B C D 297

B A C D 289
B A D C 309
B C A D 280
D C A B 343
etc.
 Facility Location
Goal is to find the optimal location of one or more
new facilities. Optimality depends on the objective
used. In many systems, the objective is to minimize
some measure of distance. Two common distance
measures:
 Straight line distance (Euclidean distance).
 Rectilinear Distance (as might be measured following roads
on city streets).

x  a  y b
 Facility Location Analysis
 Locating on a
 plane
 sphere
 3-dimensional space
 network
 discrete location
 Minimize
 costs
 distances
 weighted distances
 travel time
 Single versus multiple facilities
 Straight-line (Euclidean) versus Rectilinear Distances
 Locating on the Plane-Euclidean Distances

(x,y)

h2 = (x – a)2 + (y – b)2
(y – b) h

h  x  a    y  b
2 2

(a,b)

(x – a) x
The Centroid Problem
let x = the x-coordinate
y = the y-coordinate
(ai,bi) = coordinate of ith facility
wi = weight placed on the ith facility
n
min f ( x, y )   wi  x  ai    y  bi  
2 2

i 1
 
¶f n
= 2å wi ( x - ai ) = 0
Euclidean
distance
¶x i =1 squared

¶f n
= 2å wi ( y - bi ) = 0
¶y i =1
 The Solution
¶f n
= 2å wi ( x - ai ) = 0
¶x i =1

¶f n
= 2å wi ( y - bi ) = 0
n n ¶y i =1

å wx- å wa
i =1
i
i =1
i i =0
n n
xå wi = å wi ai
¶2 f n
= 2å wi > 0
i =1 i =1
n n
¶x 2

å wa i i å wb i i
i =1

¶2 f n
¶2 f
= 2å wi > 0
i =1 i =1
x* = n y* = n =0
¶y 2
¶x¶y
åw
i =1
i åw i
i =1
i =1 convex function
 The Euclidean Distance Problem
n
min f ( x, y )   wi  x  ai    y  bi  
 2 2

i 1
 

¶f 1 n 2wi ( x - ai )
= å =0
¶x 2 i =1 ( x - ai ) 2 + ( y - bi ) 2
¶f 1 n 2wi ( y - bi )
= å =0
¶y 2 i =1 ( x - ai ) + ( y - bi )
2 2
 wi
let gi ( x, y ) 
( x  ai ) 2  ( y  bi ) 2
n

 a g ( x, y )
i i
Then x  i 1
n

 g ( x, y )
i 1
i

 b g ( x, y )
i i
and y  i 1
n

 g ( x, y )
i 1
i
 If at least one half of the
cumulative weight is associated
with an existing facility, the
optimum location for the new
facility will coincide with the
existing facility. I call this the
Majority Theorem. It is also
true that the optimum location
will always fall within the
convex hull formed from the
existing points.
 A Simple Proof using an Analog Model

The convex hull

 Centroid Problem - Example
y (3,6)
2
10
6 4 (8,5)
x,y

3 5
5
(6,3)
1
5
(2,2)
(9,1)
x
Centroid Problem

Location wi ai bi wixi wiyi

P1 5 2 2 10 10
P2 10 3 6 30 60
P3 2 6 3 12 6
P4 6 8 5 48 30
P5 5 9 1 45 5
total 28 145 111

x* = 145/28 = 5.2 y* = 111/28 = 4.0

 Euclidean Distance - Example
y (1400,1200)

3
(500,800) w3 = 8

1
w1 = 4
central repair facility
w2 = 8 w = vehicles serviced per day

2
(1100,400)

x
min f ( x, y )  4 ( x  500) 2  ( y  800) 2  8 ( x  1100) 2  ( y  400) 2  8 ( x  1400) 2  ( y  1200)2
 Euclidean Distance - Example
y (1400,1200)

3
(500,800) w3 = 8

1
w1 = 4
central repair facility
w2 = 8 w = vehicles serviced per day

2
(1100,400)

x
Centroid solution: x0 = [4(500)+8(1100)+8(1400)]/20 = 1100
y0 = [4(800)+8(400)+8(1200)]/20 = 800
OPTIMAL SOLUTION: x* = 1098; y* = 649
Locating on the Plane-Rectilinear Distances

(x,y)

(y – b)
h  x  a  y b

(a,b)

(x – a) x
 Rectilinear Distance
n
min f ( x, y )   wi  x  ai  y  bi 
i 1
n n
 min  w  x  a   min  w  y  b 
i 1
i i
i 1
i i

Properties of the optimum solution:

1. can solve for x, y independently
2. x coordinate will be the same as one of the ai
3. y coordinate will be the same as one of the bi
4. Optimum x (y) coordinate is at a median location
with respect to the weights;
i.e. no more than half the movement 1 n
is to the left (up) or right (down) of median   wi
2 i 1
the location.
 An Intuitive Proof – weights = 1

7 9 6 10

x1 x2 x3 = x* x4 x5
distance = (7+9) + 9 + 6 + (6+10) = 47

7 6 3 6 10

x1 x2 x* x3 x4 x5

distance = (7+6) + 6 +3 + (3 + 6) + (3 + 6+10) = 50

 More of an Intuitive Proof
wi wi + w1 w3 + wj wj

xi x1 x2 = x* x3 xj

wi wi + w1 w3 + wj wj

xi x1 x* x2 x3 xj

w2 + w3 + wj but

Let x2 be a median location. That is w2 + w3 + wj  wi + w1

w3 + wj  wi + w1 + w2
 More of More of an Intuitive Proof
wi wi + w1 w3 + wj wj

xi x1 x2 = x* x3 xj

wi wi + w1 w3 + wj wj

xi x1 x2 x* x3 xj

wi + w1 + w2 but

Let x2 be a median location. That is w2 + w3 + wj  wi + w1

w3 + wj  wi + w1 + w2
 Rectilinear Distance - Example
Warehouses: A B C D E total
location: (0,0) (3,16) (18,2) (8,18) (20,2)
weight: 5 22 41 60 34 162
median = 81
warehouse x-coord weight cumulative wgt
A 0 5 5
B 3 22 27
D 8 60 87
C 18 41 128
E 20 34 162

x* = 8
 Rectilinear Distance - Example
Warehouses: A B C D E total
location: (0,0) (3,16) (18,2) (8,18) (20,2)
weight: 5 22 41 60 34 162
median = 81
warehouse y-coord weight cumulative wgt
A 0 5 5
C,E 2 41+34 80
B 16 22 102
D 18 60 162

y* = 16
 Rectilinear Distance - Example
y
5 (20,22)
4 w5 = 6
w4 = 9
(4,20) factory
(x,y)
w3 = 12
w1 = 15
w2 = 3 3

1 (22,8)
(6,6) 2
(14,4)

retail outlet centers x

 Rectilinear Distance - Example

retail cumulative retail cumulative

outlet x-coord weight outlet y-coord weight

#4 4 9 #2 4 3
#1 6 24 #1 6 18
#2 14 27 #3 8 30
#5 20 33 #4 20 39
#3 22 45 #5 22 45
median = 45/2 = 22.5

(x*,y*) = (6,8)
 Rectilinear Distance - Example
y

(4,20) 5 (20,22)
4 w5 = 6
w4 = 9

factory w3 = 12
(6,8) 3
w1 = 15 w2 = 3 (22,8)
1
(6,6) 2
(14,4)

retail outlet centers x

 MiniMax Criterion
 Locate a facility to minimize the maximum distance
traveled from any of n existing facilities
 Applications
 locating a rural health clinic
 placement of fire stations and other emergency equipment
 location of a parking lot
 Useful if no continuous travel between all existing
facilities; travel will not be performed over all routes
 What about a maximin criterion?
 An Rectilinear Formulation
Min z
subj.to: x - a i  y - bi  z; i  1, 2,..., n
.....
Min z
 y - bi    x - a i   z
  y - bi    x - a i   z 3 variables
 y - bi    x - a i   z 4n constraints

  y - bi    x - a i   z
Equivalent to finding the center of the smallest diamond that
contains all of the (ai, bi)
 Rectilinear Minimax Solution
f ( x, y )  max  x  ai  y  bi 
1i  n

f ( x*, y*)  min f ( x, y )

x, y
c1 = min (ai + bi)
c2 = max (ai + bi)
c3 = min (-ai + bi)
c4 = max (-ai + bi)
c5 = max(c2 – c1, c4 – c3)
x1 = (c1 – c3 )/2
y1 = (c1 + c3 + c5)/2
x2 = (c2 – c4 )/2
y2 = (c2 + c4 - c5)/2
01
x* = x1 + (1- )x2
y* = y1 + (1- )y2
f(x*,y*) = c5 /2
 The Minimax Company wishes to locate a parking lot
relative to its four factories so that the maximum distance
any employee must walk is minimized.

c1 = min(ai + bi) = min(10,9,14,22) = 9

(5.5,10)
c2 = max(ai + bi) = max (10,9,14,22) = 22
10 (10,12) c3 = min (-ai + bi) = min (6,1,-2,2) = -2
c4 = max (-ai + bi) = max (6,1,-2,2) = 6
c5 = max(c2 – c1, c4 – c3) = max(13,8) = 13

x1 = (c1 – c3 )/2 = 5.5

(8,7.5) y1 = (c1 + c3 + c5)/2 = 10
(2,8)
(8,6) x2 = (c2 – c4 )/2 = 8
(4,5) y2 = (c2 + c4 - c5)/2 = 7.5
2

x* = 5.5 + 8(1- )
5.5 8
y* = 10  + 2.5(1- )
f(x*,y*) = c5 /2 = 6.5
 A Euclidean Distance Formulation

Min z

 x - a i    y - bi   z; i  1, 2,..., n
2 2
subj.to:

Equivalent to finding the center of the circle having the smallest

radius that contains all of the (xi, yi)
Mini-max Euclidean Distance

10 (10,12)

(2,8)
(8,6)
(4,5)
2

5.5 8
 Multifacility Location
•Locate m facilities relative to n existing facilities
•(Weighted) travel occurs among the new facilities
Min f1 ( x)  f 2 ( x)
m n
f1 ( x)  
1 j k m
v jk x j  xk   wij x j  ai
j 1 i 1
m n
f2 ( y)  
1 j k m
v jk y j  yk   wij y j  bi
j 1 i 1
 The Mathematical Formulation

vik  c jk  d jk    wij  eij  fij 

m n
Min f1 (x)  
1 j  k  m j 1 i 1

subject to :
x j  xk  c jk  d jk
x j  ai  eij  fij

I get it. The “c” and “d” variables

and the “e” and “f” variables
cannot be in the basis at the
same time. At least one must
always be zero (nonbasic).
 Example Problem
A company is to locate two factories relative to its three major
outlet stores. The following data pertains:
Store 1 Store 2 Store 3
coordinates (5,18) (12,14) (18,5)
weight1 (wi1) 21 18 6
weight2 (wi2) 4 23 36
interaction v12 = 9
note: weights are train carloads per week
travel by rail which is mostly rectilinear
 Where in the World are these stores?

20

15

10

0
0 5 10 15 20 25
 The Formulation – x
Min f1 ( x)  9  c  d   21 e11  f11   4  e12  f12 
18  e21  f 21   23  e22  f 22   6  e31  f 31   36  e32  f 32 
subject to :
x1  x2  c  d
x1  5  e11  f11
x1  12  e21  f 21
x1  18  e31  f31
x2  5  e12  f12
x2  12  e22  f 22
x2  18  e32  f32
 The Formulation – y
Min f 2 ( y )  9  c  d   21 e11  f11   4  e12  f12 
18  e21  f 21   23  e22  f 22   6  e31  f 31   36  e32  f 32 
subject to :
y1  y2  c  d
y1  18  e11  f11
y1  14  e21  f 21
y1  15  e31  f31
y2  18  e12  f12
y2  14  e22  f 22
y2  15  e32  f32
 Solver Solution
coord c-d e1 e2 e3 f1 f2 f3 sumprod
x1 12 0 7 0 0 0 0 6 183
x2 18 6 13 6 0 0 0 0 190
v wi1 21 18 6 21 18 6 427
9 wi2 4 23 36 4 23 36
constr -2.14E-12 5 12 18 5 12 18
RHS 0 ai 5 12 18 5 12 18
coord c-d e1 e2 e3 f1 f2 f3 sumprod
y1 14 0 0 0 9 4 0 0 138
y2 14 0 0 0 9 4 0 0 340
v wi1 21 18 6 21 18 6 478
9 wi2 4 23 36 4 23 36
constr 0 18 14 5 18 14 5
RHS 0 bi 18 14 5 18 14 5

(x1*,y1*) = (12,14)
(x2*,y2*) = (18,14)
 Where are the factories?
20

15

10

0
0 5 10 15 20 25
(x1*,y1*) = (12,14) ; (x2*,y2*) = (18,14)