HO SPEOPMA-TE001 Lecture04 20181006 Location and Layout Decisions

DLSP-CSB SMIT Lecture04 Handout 20181006
SPEOPMA Quality Management Basics Page 1 of 24
Topics Outline
Location and Layout Decisions  Location decisions
 The strategic importance of location decisions
 Factors that affect location decisions
 Methods of evaluating location alternatives
PRODUMA-TO001
School of Management and IT  Service location strategies
DLSP-College of St. Benilde  Layout decisions
 The strategic importance of layout decisions
 Types of layout
 Office layout
 Retail layout
 Warehousing and storage layout
 Fixed position layout
 Process-oriented layout
Ramon H. Enriquez RME, MIE&M
Management Consultant/ Prof. Lecturer
 Work cells
Member, Asso. for Supply Chain and  Repetitive and process focused layout.
Operations Management (APICS)
1-1 1-3
10 Strategic Decision Areas

Federal Express
1. Product
2. Quality
3. Process  Central hub concept
4. Location  Enables service to more locations with
fewer aircraft
5. Layout  Enables matching of aircraft flights with
6. Human Resource package loads
7. Supply chain  Reduces mishandling and delay in
transit because there is total control of
8. Inventory packages from pickup to delivery
9. Scheduling
10. Maintenance
1-2 1-4
Prof. Ramon H. Enriquez RME, MIE&M 2018-10-05 1

Location Strategy Location Strategy
 One of the most important decisions a

The objective of location strategy is firm makes
to maximize the benefit of location  Increasingly global in nature
to the firm
 Significant impact on fixed and
variable costs
 Decisions made relatively infrequently
 The objective is to maximize the
benefit of location to the firm
1-5 1-7
Topics Outline
Location and Costs
 Location decisions
 Factors that affect location decisions  Location decisions based on low
 Methods of evaluating location alternatives cost require careful consideration
 Service location strategies
 Layout decisions  Once in place, location-related
 The strategic importance of layoutdecisions costs are fixed in place and
 Types of layout difficult to reduce
 Office layout
 Retail layout  Determining optimal facility
location is a good investment
 Work cells
 Repetitive and process focused layout.
1-6 1-8

Location and Innovation Location Decisions

 Cost is not always the most important Country Decision Key Success Factors
aspect of a strategic decision 1. Political risks, government
rules, attitudes, incentives
 Four key attributes when strategy is
2. Cultural and economic
based on innovation issues
 High-quality and specialized inputs 3. Location of markets
 An environment that encourages 4. Labor talent, attitudes,
investment and local rivalry productivity, costs
5. Availability of supplies,
 A sophisticated local market communications, energy
 Local presence of related and 6. Exchange rates and
supporting industries Figure 8.1 currency risks
1-9 1 - 11
Location Decisions Location Decisions

Region/ Key Success Factors
Community
 Long-term decisions Decision 1. Corporate desires
2. Attractiveness of region
 Decisions made infrequently
MN 3. Labor availability and costs
 Decision greatly affects both fixed WI 4. Costs and availability of utilities
and variable costs MI 5. Environmental regulations
 Once committed to a location, IL IN
OH 6. Government incentives and
many resource and cost issues fiscal policies
are difficult to change 7. Proximity to raw materials and
customers
Figure 8.1 8. Land/construction costs
1 - 10 1 - 12

Location Decisions Topics Outline

Site Decision Key Success Factors  The strategic importance of location decisions
1. Site size and cost  Methods of evaluating location alternatives
2. Air, rail, highway, and  Service location strategies
waterway systems  Layout decisions
3. Zoning restrictions  The strategic importance of layoutdecisions
4. Proximity of services/  Types of layout
supplies needed  Office layout
 Retail layout
5. Environmental impact  Warehousing and storage layout
issues  Fixed position layout
 Work cells
Figure 8.1  Repetitive and process focused layout.
1 - 13 1 - 15
Global Competitiveness Index Factors That Affect

of Countries Location Decisions
Country 2009 Rank 2005 Rank 1. Labor productivity
Switzerland 1 4
 Wage rates are not the only cost
USA 2 1
Japan 8 10  Lower productivity may increase total cost
Canada 9 13
UK 13 9 Labor cost per day
= Cost per unit
Israel 27 23 Productivity (units per day)
China 29 48
Italy 48 38 Connecticut Juarez
India 49 22
$70 $25
Mexico 60 59 = $1.17 per unit = $1.25 per unit
60 units 20 units
Russia 63 53 Table 8.1
1 - 14 1 - 16

Factors That Affect Factors That Affect

Location Decisions Location Decisions
2. Exchange rates and currency risks 6. Political risk, values, and culture
 Can have a significant impact on costs  National, state, local governments
 Rates change over time attitudes toward private and intellectual
property, zoning, pollution, employment
3. Costs stability may be in flux
 Tangible - easily measured costs such as  Worker attitudes towards turnover, unions,
utilities, labor, materials, taxes absenteeism
 Intangible - less easy to quantify and  Globally cultures have different attitudes
include education, public transportation, towards punctuality, legal, and ethical
community, quality-of-life issues
1 - 17 1 - 19
Factors That Affect Ranking Corruption

Location Decisions Rank Country 2009 CPI Score (out of 10)
1 New Zealand 9.4 Least
4. Exchange rates and currency risks 2 Demark 9.3 Corrupt
3 Singapore, Sweden 9.2
 Can have a significant impact on cost 5 Switzerland 9.0
structure Location 8 Australia, Canada, Iceland 8.7
decisions
 Rates change over time based 12 Hong Kong 8.2
14 Germany 8.0
5. Costs on costs alone 17 Japan, UK 7.7
can create 19 USA 7.5
 Tangible - easily measured costs such as
difficult
utilities, labor, materials, ethical
taxes
37 Taiwan
39 South Korea
5.6
5.5
situations
 Intangible - less easy to quantify and 56 Malaysia 4.5
79 China 3.6 Most
include education, public transportation,
community, quality-of-life 89 Mexico 3.3 Corrupt
146 Russia 2.2
1 - 18 1 - 20

Factors That Affect Clustering of Companies

Location Decisions
Industry Locations Reason for clustering
7. Proximity to markets Wine making Napa Valley (US) Natural resources of
Bordeaux region land and climate
 Very important to services (France)
 JIT systems or high transportation costs Software firms Silicon Valley, Talent resources of
may make it important to manufacturers Boston, Bangalore bright graduates in
(India) scientific/technical
8. Proximity to suppliers areas, venture
capitalists nearby
 Perishable goods, high transportation
costs, bulky products Race car Huntington/North Critical mass of talent
builders Hampton region and information
(England)
1 - 21 Table 8.3 1 - 23
Factors That Affect Clustering of Companies

Location Decisions
Industry Locations Reason for clustering
9. Proximity to competitors Theme parks Orlando, Florida A hot spot for
(Disney World, entertainment, warm
 Called clustering Universal weather, tourists, and
Studios) inexpensive labor
 Often driven by resources such as natural,
information, capital, talent Electronics Northern Mexico NAFTA, duty free
firms export to US
 Found in both manufacturing and service
industries Computer Singapore, Taiwan High technological
hardware penetration rate and
manufacturers per capita GDP,
skilled/educated
workforce with large
pool of engineers
1 - 22 Table 8.3 1 - 24

Topics Outline Factor-Rating Method

1. Define a clear decision-statement
 The strategic importance of location decisions 2. Develop a list of relevant factors/ criteria, and determine
which are MUSTS and WANTS.
 Methods of evaluating location alternatives 3. Identify alternative courses of action.
 Service location strategies 4. Evaluate each alternative against the MUSTS factors, and
 Layout decisions eliminate those that fails to satisfy them.
 The strategic importance of layoutdecisions 5. Evaluate the remaining alternatives against the WANTS
 Types of layout (consistently using a particular scale e.g. 1-10}:
 Office layout
a. Assign a weight to each of the remaining WANTS factor.
 Retail layout
 Warehousing and storage layout b. For each WANT factor, assign appropriate score for each
Alternative.
 Process-oriented layout c. Multiply scores by their respective weights and sum them up for
 Work cells for each location.
 Repetitive and process focused layout. d. Assess possible adverse consequences of highest Alternative.
1 - 25 e. Make the recommendation. 1 - 27
Location Decision Models

Factor-Rating Example
 Factor Rating
Key Scores
 Locational Break-even Success (out of 100) Weighted Scores
Factor Weight France Denmark France Denmark
 Center of Gravity Labor
availability
and attitude .25 70 60 (.25)(70) = 17.5 (.25)(60) = 15.0
 Transportation Method People-to-
car ratio .05 50 60 (.05)(50) = 2.5 (.05)(60) = 3.0
Per capita
income .10 85 80 (.10)(85) = 8.5 (.10)(80) = 8.0
Tax structure .39 75 70 (.39)(75) = 29.3 (.39)(70) = 27.3
Education
and health .21 60 70 (.21)(60) = 12.6 (.21)(70) = 14.7
Totals 1.00 70.4 68.0
Table 8.4
1 - 26 1 - 28

Locational Locational Break-Even

Break-Even Analysis Analysis Example
–
 Method of cost-volume analysis used for $180,000 –
–
industrial locations $160,000 –
$150,000 –
 Three steps in the method $130,000 –

–
Annual cost
–
1. Determine fixed and variable costs for $110,000 –
–
each location –
$80,000 –
2. Plot the cost for each location $60,000 –
–
–
3. Select location with lowest total cost for –
Akron Chicago
expected production volume $30,000 – lowest
Bowling Green
lowest cost
lowest
– cost cost
$10,000 –
| | | | | | |
–
0 500 1,000 1,500 2,000 2,500 3,000
Figure 8.2
Volume
1 - 29 1 - 31
Locational Break-Even Center-of-Gravity Method

Analysis Example
Three locations:  Finds location of distribution
Selling price = $120
center that minimizes distribution
Expected volume = 2,000 units costs
Fixed Variable Total  Considers
City Cost Cost Cost
 Location of markets
Akron $30,000 $75 $180,000
Bowling Green $60,000 $45 $150,000  Volume of goods shipped to those
Chicago $110,000 $25 $160,000 markets
 Shipping cost (or distance)
Total Cost = Fixed Cost + (Variable Cost x Volume)
1 - 30 1 - 32

Transportation Model
Center-of-Gravity Method of Linear Programming technique
North-South
Chicago (30, 120)

New York (130, 130)
 Finds amount to be shipped from
120 – several points of supply to several
Pittsburgh (90, 110)
points of demand
90 –
 Solution will minimize total

60 –
production and shipping costs
30 –
Atlanta (60, 40)  A special class of linear
programming problems
–
| | | | | |
East-West
30 60 90 120 150
Arbitrary
origin
Figure 8.3
1 - 33 1 - 35
Worldwide Distribution
Center-of-Gravity Method of Cars and Parts
North-South
New York (130, 130)
Chicago (30, 120)
120 –
Pittsburgh (90, 110)
90 – + Center of gravity (66.7, 93.3)
60 –
30 –
Atlanta (60, 40)
–
| | | | | |
East-West
30 60 90 120 150
Arbitrary
origin
Figure 8.3 Figure 8.4
1 - 34 1 - 36

LP Formulation Topics Outline

 Layout decisions
 The strategic importance of layoutdecisions
 Types of layout
 Office layout
 Retail layout
 Work cells
1 - 37 1 - 39
Service Location Strategy

1. Purchasing power of customer-drawing area
2. Service and image compatibility with
demographics of the customer-drawing area
3. Competition in the area
4. Quality of the competition
5. Uniqueness of the firm’s and competitors’
locations
6. Physical qualities of facilities and neighboring
businesses
7. Operating policies of the firm
8. Quality of management
1 - 38 1 - 40

Location Strategies
The Call Center Industry
Service/Retail/Professional Location Goods-Producing Location
Revenue Focus Cost Focus
Volume/revenue Tangible costs  Requires neither face-to-face
Drawing area; purchasing power
Competition; advertising/pricing
Transportation cost of raw material
Shipment cost of finished goods
contact nor movement of materials
Energy and utility cost; labor; raw
Physical quality material; taxes, and so on  Has very broad location options
Parking/access; security/lighting;
appearance/image Intangible and future costs
Attitude toward union
 Traditional variables are no longer
Cost determinants Quality of life relevant
Rent Education expenditures by state
Management caliber Quality of state and local
government
 Cost and availability of labor may
Operations policies (hours, wage
rates) drive location decisions
Table 8.6
1 - 41 1 - 43
Topics Outline
How Hotel Chains Select Sites
 Location is a strategically important  The strategic importance of location decisions
decision in the hospitality industry  Factors that affect location decisions
 La Quinta started with 35 independent  Service location strategies
variables and worked to refine a
regression model to predict profitability
 The strategic importance of layoutdecisions
 The final model had only four variables  Types of layout
Office layout
 Price of the inn r2= .51 
 Retail layout
 Median income levels 51% of the  Warehousing and storage layout
profitability is  Fixed position layout
 State population per inn predicted by  Process-oriented layout
 Location of nearby colleges just these four  Work cells
variables!  Repetitive and process focused layout.
1 - 42 1 - 44

Innovations at McDonald’s McDonald’s New Layout

 Indoor seating (1950s)  Seventh major innovation
 Drive-through window (1970s)  Redesigning all 30,000 outlets around
the world
 Adding breakfast to the menu
(1980s)  Three separate dining areas
 Linger zone with comfortable chairs and
 Adding play areas (late 1980s) Wi-Fi connections
 Redesign of the kitchens (1990s)  Grab and go zone with tall counters
 Flexible zone for kids and families
 Self-service kiosk (2004)
 Facility layout is a source of
 Now three separate dining sections competitive advantage
1 - 45 1 - 47
© 2011 Pearson © 2011 Pearson
Topics Outline
Innovations at McDonald’s
 Indoor seating (1950s)  The strategic importance of location decisions
 Drive-through window (1970s)  Methods of evaluating location alternatives
 Adding breakfast to Six

the out
menu
of the
(1980s) seven are  The strategic importance of layout decisions
 Adding play areas (late layout
1980s)  Types of layout
decisions!  Office layout
 Redesign of the kitchens (1990s)  Retail layout
 Self-service kiosk (2004)  Fixed position layout
 Now three separate dining sections  Work cells
1 - 46 1 - 48
© 2011 Pearson

Topics Outline
Strategic Importance of Layout  Location decisions
Decisions  The strategic importance of location decisions
The objective of layout strategy
is to develop an effective and
efficient layout that will meet the  Types of layout
firm’s competitive requirements  Office layout
 Retail layout
 Work cells
1 - 49 1 - 51
Layout Design Considerations Types of Layout

1. Office layout
 Higher utilization of space, equipment,
and people 2. Retail layout
 Improved flow of information, materials, 3. Warehouse layout
or people 4. Fixed-position layout
 Improved employee morale and safer
working conditions 5. Process-oriented layout
 Improved customer/client interaction 6. Work-cell layout
 Flexibility 7. Product-oriented layout
1 - 50 1 - 52

Topics Outline
Relationship Chart
 Types of layout
 Office layout
 Retail layout
 Work cells
Figure 9.1
1 - 53 1 - 55
Topics Outline
Office Layout
 Positions workers, their equipment, and
spaces/offices to provide for movement of  The strategic importance of location decisions
information  Factors that affect location decisions
1. Grouping of workers, their equipment, and
spaces to provide comfort, safety, and
movement of information  Layout decisions
2. Movement of
information is main  Types of layout
 Office layout
distinction
 Retail layout
3. Typically in state of  Warehousing and storage layout
flux due to frequent  Fixed position layout
technological  Process-oriented layout
changes  Work cells
1 - 54 1 - 56

Retail Layout Retail Slotting

 Manufacturers pay fees to retailers
to get the retailers to display (slot)
 Allocates shelf space and their product
responds to customer behavior
 Contributing factors
1. Objective is to maximize
profitability per square foot of  Limited shelf space
floor space  An increasing number of new
products
2. Sales and profitability vary
directly with customer  Better information about sales
through POS data collection
exposure
 Closer control of inventory
1 - 57 1 - 59
Store Layout Servicescapes

1. Ambient conditions - background
characteristics such as lighting, sound,
smell, and temperature
2. Spatial layout and functionality - which
involve customer
circulation path planning,
aisle characteristics, and
product grouping
3. Signs, symbols, and
artifacts - characteristics
of building design that
Figure 9.2
carry social significance
1 - 58 1 - 60

Topics Outline Warehousing and Storage

 Location decisions Layouts
Material Handling Costs
 Service location strategies  All costs associated with the transaction
 Layout decisions  Incoming transport
 The strategic importance of layout decisions  Storage
 Types of layout
 Office layout
 Finding and moving material
 Retail layout  Outgoing transport
 Equipment, people, material, supervision,
insurance, depreciation
 Work cells  Minimize damage and spoilage
1 - 61 1 - 63
Warehousing and Storage Warehousing and Storage

Layouts Layouts
 Warehouse density tends to vary
 Addresses trade-offs between inversely with the number of different
space and material handling items stored
1. Objective is to optimize trade-offs  Automated Storage and
between handling costs and costs Retrieval Systems (ASRSs)
associated with warehouse space can significantly improve
warehouse productivity by
2. Maximize the total “cube” of the an estimated 500%
warehouse – utilize its full volume
while maintaining low material  Dock location is a key
handling costs design element
1 - 62 1 - 64

Warehouse Layout Warehouse Layout

Traditional Layout Cross-Docking Layout
Customization Storage racks
Shipping and receiving docks
Office
Conveyor
Staging
Office
1 - 65 1 - 67
Topics Outline
Cross-Docking
 Materials are moved directly from  The strategic importance of location decisions
receiving to shipping and are not placed  Factors that affect location decisions
in storage in the warehouse  Methods of evaluating location alternatives
Service location strategies
 Requires tight 
scheduling and  Layout decisions

accurate shipments,  The strategic importance of layout decisions
 Types of layout
bar code or RFID
 Office layout
identification used for  Retail layout
advanced shipment  Warehousing and storage layout
notification as  Fixed position layout
materials  Process-oriented layout
Work cells
are unloaded 

1 - 66 1 - 68

Fixed-Position Layout Process-Oriented Layout

 Addresses the layout requirements of  Deals with low-volume, high-variety
large, bulky projects such as ships and production (also called job shop or
buildings intermittent production)
1. Product remains in one place 1. Like machines and equipment are
2. Workers and equipment come to site grouped together
3. Complicating factors 2. Flexible and capable of handling a
a. Limited space at site wide variety of products or services
b. Different materials
required at different 3. Scheduling can be difficult and
stages of the project setup, material handling, and labor
c. Volume of materials costs can be high
needed is dynamic
1 - 69 1 - 71
Topics Outline
Process-Oriented Layout
Patient A - broken leg
 Factors that affect location decisions ER
 Methods of evaluating location alternatives triage Emergency room admissions
room
 Service location strategies Patient B - erratic heart
Surgery pacemaker
 The strategic importance of layout decisions Laboratories
 Types of layout
 Office layout
 Retail layout
Radiology ER Beds Pharmacy Billing/exit
 Work cells Figure 9.3
1 - 70 1 - 72

Layout at Arnold Palmer Hospital Process Layout Example

Area 1 Area 2 Area 3
Pie-shaped
Central break rooms
and medical
supply rooms Assembly Painting Machine Shop
Department Department Department
(1) (2) (3)
Local linen Central nurses
supply station
40’
Receiving Shipping Testing

(4) (5) (6)

Figure 9.5
Local 60’
nursing pod
1 - 73 1 - 75
Process-Oriented Layout Process Layout Example
 Arrange work centers so as to Number of loads per week

Department Assembly Painting Machine Receiving Shipping Testing
minimize the costs of material (1) (2) Shop (3) (4) (5) (6)
handling Assembly (1) 50 100 0 0 20
 Basic cost elements are Painting (2) 30 50 10 0
Machine Shop (3) 20 0 100

 Number of loads (or people)
moving between centers Receiving (4) 50 0
0
 Distance loads (or people) move Shipping (5)
between centers Testing (6)
Figure 9.4
1 - 74 1 - 76

Process Layout Example Process Layout Example

Interdepartmental Flow Graph
100
Painting Assembly Machine Shop
(2) (1) (3)
Assembly 50 Painting 30 Machine
(1) (2) Shop (3)
40’
10
100 Receiving Shipping Testing
(4) (5) (6)
Receiving Shipping Testing
(4) (5) (6)
50
Figure 9.8
Figure 9.6 60’
1 - 77 1 - 79
Process-Oriented Layout Computer Software

n n
 Graphical approach only works for
Minimize cost = ∑ ∑ Xij Cij small problems
i=1 j=1
 Computer programs are available to

where n = total number of work centers or solve bigger problems
departments
i, j = individual departments  CRAFT
Xij = number of loads moved from  ALDEP
department i to department j
Cij = cost to move a load between  CORELAP
department i and department j  Factory Flow
1 - 78 1 - 80

Computer Software Work Cells

 Three dimensional visualization  Arranges machinery and equipment to
focus on production of a single product
software allows managers to view or group of related products
possible layouts and assess process,
1. Reorganizes people and machines into
material groups to focus on single products or
handling, product groups
efficiency, 2. Group technology identifies products that
and safety have similar characteristics for particular
cells
issues
3. Volume must justify cells
4. Cells can be reconfigured as designs or
volume changes
1 - 81 1 - 83
Topics Outline
Advantages of Work Cells
1. Reduced work-in-process inventory
 Factors that affect location decisions 2. Less floor space required
3. Reduced raw material and finished
goods inventory
 The strategic importance of layout decisions 4. Reduced direct labor
 Types of layout 5. Heightened sense of employee
 Office layout participation
 Retail layout
 Warehousing and storage layout 6. Increased use of equipment and
 Fixed position layout machinery
 Work cells 7. Reduced investment in machinery and
 Repetitive and process focused layout. equipment
1 - 82 1 - 84

Topics Outline
Improving Layouts Using Work  Location decisions
Cells  The strategic importance of location decisions
 Types of layout
Current layout - workers
in small closed areas.  Office layout
 Retail layout
Improved layout - cross-trained  Warehousing and storage layout
workers can assist each other.
May be able to add a third worker
as additional output is needed.  Process-oriented layout
 Work cells
Figure 9.10 (a)  Repetitive and process focused layout.
1 - 85 1 - 87
Improving Layouts Using Work Repetitive and Product-

Cells Oriented Layout
Seeks the best personnel and machine utilizations
in repetitive or continuous production by organizing
around products or families of similar high-volume,
low-variety products
1. Volume is adequate for high equipment
Current layout - straight utilization
lines make it hard to balance Improved layout - in U
tasks because work may not shape, workers have better
be divided evenly access. Four cross-trained 2. Product demand is stable enough to justify high
workers were reduced.
investment in specialized equipment
U-shaped line may reduce employee movement 3. Product is standardized or approaching a phase
and space requirements while enhancing of life cycle that justifies investment
communication, reducing the number of
workers, and facilitating inspection 4. Supplies of raw materials and components are
Figure 9.10 (b)
adequate and of uniform quality
1 - 86 1 - 88

Product-Oriented Layouts Disassembly Lines

 Fabrication line
 Builds components on a series of machines  Disassembly is being considered in new
 Machine-paced product designs
 Require mechanical or engineering changes  “Green” issues and recycling standards are
to balance important consideration
 Assembly line  Automotive
 Puts fabricated parts together at a series of disassembly
workstations is the 16th
 Paced by work tasks largest
 Balanced by moving tasks industry in
the US
Both types of lines must be balanced so that the
time to perform the work at each station is the same
1 - 89 1 - 91
McDonald’s Assembly Line

Assembly-Line Balancing
 Objective is to minimize the imbalance
between machines or personnel while
meeting required output
 Starts with the precedence
relationships
 Determine cycle time
 Calculate theoretical
minimum number of
workstations
 Balance the line by
assigning specific
Figure 9.12 tasks to workstations
1 - 90 1 - 92

End of Presentation
1 - 93

HO SPEOPMA-TE001 Lecture04 20181006 Location and Layout Decisions

Încărcat de

Informații document

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

HO SPEOPMA-TE001 Lecture04 20181006 Location and Layout Decisions

Încărcat de

Drepturi de autor:

Formate disponibile

DLSP-CSB SMIT Lecture04 Handout 20181006

SPEOPMA Quality Management Basics Page 1 of 24

10 Strategic Decision Areas

Prof. Ramon H. Enriquez RME, MIE&M 2018-10-05 1

Location Strategy Location Strategy

 One of the most important decisions a

Prof. Ramon H. Enriquez RME, MIE&M 2018-10-05 2

Location and Innovation Location Decisions

Location Decisions Location Decisions

Prof. Ramon H. Enriquez RME, MIE&M 2018-10-05 3

Location Decisions Topics Outline

Global Competitiveness Index Factors That Affect

Prof. Ramon H. Enriquez RME, MIE&M 2018-10-05 4

Factors That Affect Factors That Affect

Factors That Affect Ranking Corruption

Prof. Ramon H. Enriquez RME, MIE&M 2018-10-05 5

Factors That Affect Clustering of Companies

Factors That Affect Clustering of Companies

Prof. Ramon H. Enriquez RME, MIE&M 2018-10-05 6

Topics Outline Factor-Rating Method

Location Decision Models

Prof. Ramon H. Enriquez RME, MIE&M 2018-10-05 7

Locational Locational Break-Even

 Three steps in the method $130,000 –

Locational Break-Even Center-of-Gravity Method

Prof. Ramon H. Enriquez RME, MIE&M 2018-10-05 8

Chicago (30, 120)

 Solution will minimize total

Prof. Ramon H. Enriquez RME, MIE&M 2018-10-05 9

LP Formulation Topics Outline

Service Location Strategy

Prof. Ramon H. Enriquez RME, MIE&M 2018-10-05 10

Prof. Ramon H. Enriquez RME, MIE&M 2018-10-05 11

Innovations at McDonald’s McDonald’s New Layout

 Adding breakfast to Six

Prof. Ramon H. Enriquez RME, MIE&M 2018-10-05 12

Layout Design Considerations Types of Layout

Prof. Ramon H. Enriquez RME, MIE&M 2018-10-05 13

Prof. Ramon H. Enriquez RME, MIE&M 2018-10-05 14

Retail Layout Retail Slotting

Store Layout Servicescapes

Prof. Ramon H. Enriquez RME, MIE&M 2018-10-05 15

Topics Outline Warehousing and Storage

Warehousing and Storage Warehousing and Storage

Prof. Ramon H. Enriquez RME, MIE&M 2018-10-05 16

Warehouse Layout Warehouse Layout

Shipping and receiving docks

scheduling and  Layout decisions

 Repetitive and process focused layout.

Prof. Ramon H. Enriquez RME, MIE&M 2018-10-05 17

Fixed-Position Layout Process-Oriented Layout

Prof. Ramon H. Enriquez RME, MIE&M 2018-10-05 18

Layout at Arnold Palmer Hospital Process Layout Example

Receiving Shipping Testing

Area 4 Area 5 Area 6

Process-Oriented Layout Process Layout Example

 Arrange work centers so as to Number of loads per week

 Basic cost elements are Painting (2) 30 50 10 0

Machine Shop (3) 20 0 100

between centers Testing (6)

Prof. Ramon H. Enriquez RME, MIE&M 2018-10-05 19

Process Layout Example Process Layout Example

Process-Oriented Layout Computer Software

 Computer programs are available to