Facility design

Plant/process Layout
Production/manufacturing management
Service sector creates products out of services

Vistara airlines: travel services/ transportation

Economy seats, premium economy, business class
Once we have a product, its time to actually manufacture and deliver
Layout design
• Advantages and disadvantages with every decision you take
• There is generally a tradeoff.
How to maximize profits
• Profits=Revenue-Cost (god equation)
• Revenue=f(Sale price, sale volume, marketing communication
awareness, discounts….)
• Revenue 450 1000= 450000
• Costs= f(Raw material price, labor charges, machine operating
expenses, process efficiency, wastage…)
• Cost reduce/minimize, revenue increase/maximize
Dairy
• Input factors: milk, lactobacillus, equipment, electricity and
refrigeration, SCM, sugar, flavoring elements, manpower
• Machine service taking down, 6 months, 3000 tonnes, 1500,
• 3 machines: running at 1000 tonnes each 4 months
• 6000*10000=60000000
• hvac
profits
• Gross Profits=revenue-cost
• Net profit= gross profits-dep
• PAT= profits after tax
• Revenue=f(sales price, sales volume), marketing/awareness, discounts,
• Cost=f(raw material price, labor charges, machines, land, efficiency,
wastage,
• Iron ore iron extraction 88% decrease to 74%, 1000 tonnes coal= 750
tonnes of steel, 650 tonnes of steel
• 100%-80% goes down to say 75%
To optimize profits
• Maximize the revenue, minimize the cost.
• This process begins right at the layout.