Good morning everyone

Presentation on the topic of general procedure in facility planning

• Presented by: Palistha Sainju Sagar Dahal

Quote of the day:Change your thoughts and you change your world.

CONTENTS

ConceptGeneral procedure in facility planning1)preliminary Screening 2)Detailed analysis

i)Qualitative Analysisii) Quantitative Analysis

What is Facility Layout?

The layout facility is the physical location of the various departments/units of the facility within the premises of the facility.

The departments may be located based on the considerations such as:Less walking distanceLogical sequence of the processing requirements of the productEmergency services, etc

The factory location includes the determination of alternative site of various geographical regions. These alternative sites are subjected to various qualitative and quantitative analysis to find out the adequate alternatives among them. The procedure in facility location include:

I. Preliminary ScreeningII. Detailed analysis

This is the basis stage before selecting the facility location It includes : Proximate to customers, market, raw material(depends on the

company) Business Climate PEST Environment Availability of labor, materials etc. others

Preliminary Screening

Detailed Analysis Detailed analysis includes both macro analysis and micro analysis:

This is the way of analyzing best location by using different qualitative and quantitative methods.

Once the preliminary screening narrows alternatives sites to just a few more detailed analysis is done. The detail analysis involve either

i) Quantitative Technique Ii) Qualitative technique

Qualitative Technique

Qualitative models are the techniques of measuring non monetary factors of proposed/facility/plant location.

• The subjective evaluation of sites, regarding these qualitative factors are carried out in qualitative technique. These qualitative technique are

i) Simple Comparative chart analysisii) Factor Ratings method

1. Simple comparative chart analysis

• This method is widely used for analysis intangible factor affecting the location decision. The following steps should be followed.

i) Identify critical intangible factor affecting location decisionii) Compare all the alternative location on the basis of these factors

like good/bad, favorable/unfavorable, important/not important etc.

iii) Select the best location for organization.

Factor rating method

• This method also used for analyzing intangible factors of location.

It includes following steps; Identify the relevant factorsAssign rate to each other(1-5)Assign the rate for each alternatives(1-10)Find the cumulative total rating.Select the location with highest total score.

Conclusion : Since cumulative score for the location C is highest i.e. 119 hence location C is selected.

Quantitative Technique• Quantitative technique are used for analyzing those factors

which can be measured in terms of money.• It is basically mathematical models which can be multiple use.• They are:i) Center of gravity methodii) Locational break even analysis(BEA) analysisiii) Transportation method.

• Considers geographical coordinates i.e. distance and load• Helps to locate the plant where majority of customer find

optimal distance i.e. to search the vicinity for optimal location• Xcg= Ycg= where xi & yi each points x&y co-ordinates li=load corresponding to the point Xcg & Ycg= y co-ordinate of center of gravity.

1. Center of gravity method:

• This approach requires that the analyst find the center of gravity of the geographic area being considered

• Computing the Center of Gravity for Matrix Manufacturing

2.Locational break even analysis (BEA)

• Economic comparison of location alternatives by making cost volume analysis

• Transformation process from inputs to outputs involves two type of cost: fixed and variables

• Fixed cost :capital expenditures which are long term assets like purchase of land construction of building purchase of equipment's and machines

• Variable cost : cost which directly varies with the variation in the volume of the production for the labor directly in production raw material

• Total cost =fixed cost +variable cost

• Break-even analysis computes the amount of goods required to be sold to just cover costs

• Break-even analysis includes fixed and variable costs.

• Break-even analysis can be used for location analysis especially when the costs of each location are known

Step 1: For each location, determine the fixed and variable costsStep 2: Plot the total costs for each location on one graphStep 3: Identify ranges of output for which each location has the lowest total costStep 4: Solve algebraically for the break-even points over the identified ranges

• Break even points when TR=TC

When TC=TR , The point is called break even point.

• Solve multiple facility location• Determine the allocation pattern that minimize the cost of

transporting product from two or more plants or sources of supply to two or more warehouses or destinations.

• It only helps to find best shipping pattern between plants and warehouses

Transportation Method

Any Queries??????

Thank you