Sunday, June 8, 2008

TYPE OF LAY OUT

1. Product Layout: Hence equipments are arranged according to the need of the pr and machines are positioned according to the sequence of operation. This type of layout is used in continuous system, where the volume is large and variety is low. e.g. Textile, sugar mills and petroleum industries used this types layouts. It can be in the shape of line or U shape.
Line layout


I/P O/P




U Shape layout




I/P O/P









Advantage Limitations
Regular flow of material. Brake down in one machine will effect the work of other machines.
Minimization of material.
Short processing time. Inflexible in nature.
Less training required Required heavy capital investment.
Minimum need for buffer stock. Poor quality of supervision.
Less floor area required.

2. Process or Function Layout: In this type of layout different machines performing similar types of operations are grouped atone place for e.g. drilling machines are grouped at one place cutting machines are another, finishing at separate and packaging machine are at separate etc. This type of layout is used mainly in intermittent production process. Where variety is large and productions volumes is low.





Storage Assembling Operations
Receiving Packaging
Dispatching
Plant Office

Advantage Disadvantages
Break down in one machine doesn’t affect the working of other machine. More material handling. High investment in raw material.
Flexibility in production. More processing & space is required.
Specialization in supervision becomes possible. Inspection is more costly.More skilled laborers required.
Lower capital investment. Machine loading & buffer stock is high.

3. Stationary/Fixed/Project Layout: This type of layout is used where semi-finished and finished goods are large in size and weight so that their physical movements from one place to another is not possible. Here men, equipments, and raw materials are moved to the place where all the manufacturing activities are carried out. e.g. shipping, construction of dams, roads, bridges etc.

Advantage Disadvantages
It has benefit of both layouts. Machines and equipments moved from one place to other so heavy machines can’t be used
Worker remains busy. Low efficiency of men and machines.

PLANT LOCATION OR FACILITY LOCATION

The location may be defined as selection of a suitable place or site where the factory or plant is to be enstalled or it is a place where the plant will start its functioning. We should carefully select the site or the place because it is that site where we are going to invert a huge amount of capital. While selecting the site first of all we select the nation or country®zone®state®city®region®site. There are two factors affecting the plant location:
1. Primary factors.
2. Secondary (supporting) factors.
1. Primary Factors:

(a) Supply of raw material.
(b) Nearness to the market.
(c) Transportation facilities.
(d) Labour supply.
(e) Availability of power.
(f) Supply of capital (location of bank).

It means availability of banks and financial institutions etc. so that finances can be raised easily.

2. Secondary Factors:

(a) Natural Factor: It includes land, water climate etc. Textile sugar mills consider such natural factors heavily.
(b) Political Factors: Subsidies, licensing policy, taxation policy etc. of the government.
(c) Historical and religious Factors: Some industrious cities are of historical importance e.g. Banaras, Nasik, Kaulalampaur.
(d) Initial Start And Good Will: Some industries get located at a place which are already popular for their industrial success. e.g. Jamshedpur TATA is popular for steel industry. Opening business in such cities may have the advantage of the initial start.
(e) Government Subsidies and Facilities: Government facilities, de rebate, tax exemptions, rice subsidies, banking, postal, insurance etc, may attract the businessmen to start their units over there.

LOCATION ANALYSIS TECHNIQUES

1. Point Method: In this method points are assigned to the different factors at different sites. And the site with max points is selected for production.

Factor Potential Site
Site I Site II Site III Site IV
F-1(Labour) 3 6 8 2
F-2 4 5 9 3
F-3 7 2 6 3
Total 14 13 23 8

Since site III has maximum points so it will be selected for production.





2. Variable Weight Method: In this method, the variable weights are assigned to each factor and the sites are evaluated along the factor scale.
Factor Max Points Potential Site
Site I Site II Site III Site IV
F-1(Labour) 400 200 100 60 40
F-2 300 100 100 50 50
F-3 200 50 50 60 40
Total 900 350 250 170 130

Here site I has maximum points, that is 350 so it will be selected as production site.

3. Factor Rating Method/Weight cum Rating Method: In this method the factor weights are assigned to each factor thereafter locations are rated along the common scale. The pr of location factor ratings gives location points assignment.

Factor Potential Site
Factor Rating Location Rating Product Rating
Land 4 5 20
Labour 3 3 9
Capital 2 2 4
Material 3 1 3
Transportation 1 4 4
Total 40

4. Break even Analysis: It is a graphical representation that shows the relationship between cost and revenues. Cost is divided into two types e.g. fixed cost and variable cost. We know at break even point (TC=TR), hence no profit. Break even analysis specify the level of output that must be achieved in order to recover all the cost of operations through revenues. BEP depends upon the selling price and operating cost structure of the product. We will find out the BEP for different locations and the location with earliest BEP will be selected for production site.
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Cost
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Level of Concept

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