SITE SELECTION MODELS

QUALITATIVE QUANTITATIVE

Transportation (Load & Distance)

Transportation (Distance)

ECONOMY

FACTOR RATING (comparative)

MINI MAX (Exact Location)

Break Even Analysis

(comparative)

Gravity

Single Facility

(Exact Location) (Exact Location)

Simple Median (comparative)

Exact Location : (i) Mini Max (ii) Gravity Model (iii) Single Facility Comparative Location : (i) Factor Rating (ii) BE Analysis (iii) Simple Median


1) 2) 3) 4) 5)

1) FACTOR-RATING method):

Method

(Qualitative

Procedure : Select the criteria which play important role for selection of plant location for the proposed particular industry. Allot FACTOR RATINGs for each Criteria / Factor according to its relative importance for the particular industry. Select alternative locations among which the best one can be selected for the proposed industry. Allot LOCATION RATINGs against each criteria / Factor, for each alternative site-location. Multiply Factor Ratings by Location Ratings to get PRODUCT RATINGs for each Criteria / Factor, for each alternative site locations. Sum up such PRODUCT RATINGs for each alternative location, which gives the TOTAL RATING SCORE of that alternative location. The highest Total Rating Score indicate the best site location for that particular industry, among the optional sites.

6)

7)

FACTOR RATING Model

1) 2) 3)

Special Features of FACTOR RATING Location Model : It is a Qualitative Method for selecting Facility Location. It may consider all possible important deciding Factors influencing the selection of the plant site. It gives due weightage on the importance of each deciding Factors influencing the selection of the plant site. It also considers the suitability of the proposed site / location against each deciding Factors being considered. The method is to select the best location by comparing among a number of proposed sites but, not to find the EXACT BEST Site Location.

4) 5)

 Problem-1 : For a proposed thermal power plant, the Location-Ratings for different Criteria/Factors, of the two alternative locations A & B, are given below. Select better site location between A & B, by Factor Rating Method.
Factors Location Rating for A Location Rating for B

Factor Rating

Product Rating of A

Product Rating of B

Proximity to Fuel Availability of Water Proximity to Demand Availability of labour Access to Rail & Road Infrastructural Facility Legislation & Taxation

5
7 6 7 6 5 4

6
9 5 6 6 4 6

8 10 5 7 6 6 5

5 x 8 = 40
7 x 10 = 70 6 x 5 = 30 7 x 7 = 49 6 x 6 = 36 5 x 6 = 30 4 x 5 = 20

6 x 8 = 48
9 x 10 = 90 5 x 5 = 25 6 x 7 = 42 6 x 6 = 36 4 x 6 = 24 6 x 5 = 30

TOTAL RATING SCORE

275

295

Total Rating Score of Site B is greater than Total Rating Score of Site A. So, by Factor Rating Method Site B is better. Ans

 2) Gravity Location Model (LoadDistance):

Here loads and Euclidean (ie diagonal ie shortest) distances are simultaneously considered, instead of Rectilinear distances, between the facilities and each alternative site locations. Euclidean distance between each facility and any site location, Di is given by, Di2 = (x xi)2 + (y yi)2 , And let the load (quantity of material) to be transported in each case be Wi The corresponding transport cost for the site location at (x,y), C (x,y) = K. Wi x [Di ] =K. { Wi x [(x xi)2 + (y yi)2 ]} For minimizing C(x,y) , applying Minimization theory d [C (x,y) ] = 0 & d [C (x,y) ] dx dy which gives the only one best site location (x*, y*) as

=0

x* = Wi . xi Wi

&

y* = Wi . yi Wi


1)
2)

Special Features of Gravity Location Model :

It is a Quantitative Method for selecting Facility Location.
It is based both on LOADS as well as DISTANCES of transport between the facilities and the plant site.

3)
4)

The distances are calculated as EUCLIDEAN distances

By this method the EXACT BEST Location of the plant is directly found out and the method is to select the best location not by comparing among a number of proposed or available plant-locations. By this method the only one BEST plant/facility is found out. Location of the

5)

 Problem-2: Gravity Location Model Select by Gravity Location Model method the best Plant site if the available data on the existing Facilities are as given below,

Existing Facilities F1 F2 F3 F4

Location-Coordinate 20, 30 10, 40 30, 50 40, 60

Load to/from Facilities (unit) 755 900 450 500

Answer-6:
Facility F1 F2 Xi 20 10 Yi
30 40

Load(Wi) 755 900

Wi . Xi 15,100 9,000

Wi . Yi 22,650 36,000

F3
F4 SUM

30
40

50
60

450
500 2,605

13,500
20,000 57,600

22,500
30,000 111,150

X* = Wi . Xi Wi

= 57,600

= 22.111

2,605

Y* = Wi . yi = 111,150 = 42.668 Wi 2,605

 3) SIMPLE MEDIAN Model (Load-Distance):

Here, best site location among more than one alternative proposed or available sites is selected by COMPARISON among them, where the Total Transportation Cost is least [based on the value of Total (Load x distance x Cost Rate of Transportation) ]. F1 , F2 , F3 , F4 , are the facilities. Total Transportation Cost for any alternative proposed site A is given by [(Wi x DA-i) x Ci] , where, i = facility no., DA-i = I(Xi X*)I + I(Yi Y*)I , Wi is the load of transportation corresponding to each facility and Ci : corresponding Unit Cost of transportation

Y
F1

F1 , F2 , F3 , F4 , are the facilities. F4

DA2

F2
y2
x2

A, B, are alternative site location

SA

Here, Site SA is better than SB,

if

SB

[(Wi x DA-i) x Ci] < [(Wi x DB-i) x Ci]

F3

SIMPLE MEDIAN Model

Special Features of Simple Median Model : (i) It is a Quantitative Method for selecting Facility Location. (ii) This model considers Transport Cost of materials based on the combination effect of both the loads as well as distances (between the plant location and the facilities) to be transported (iii) The method considers RECTILINEAR distances (instead of Euclidean distances, between the facilities and site location). (iv) The method is to select the best location among a number of proposed sites by comparing the transport cost, but NOT to find the EXACT BEST Site Location.

Problem-3 : SIMPLE MEDIAN Model Select by Simple Median Model method the better Plant site between two available site options SA (20,10) and SB ( 40,50), if the available data on the existing Facilities are as given below,
Existing Facilities Location-Coordinate Load to/from Facilities (unit) 755 900 450 500 Unit Transport Cost (Rs / unit distance / unit load) 100 300 200 250

F1 F2 F3 F4

20, 30 10, 40 30, 50 40, 60

Answer-3: For site SA (20,10)

Facility Location F1 F2 F3 F4 20, 30 10, 40 30, 50 40, 60 I Xi X* I
2020 = 0 10-20 = 10 30-20 = 10 40-20 = 20

I Yi Y* I
30-10 = 20 40-10 = 30 50-10 = 40 60-10 = 50

Di
0+20 = 20 10+30 = 40 10+40 = 50 20+50 = 70

Load(Wi) 755 900 450 500

Ci
100 300 200 250

TC= DiWi Ci 15,10,000 108,00,000 45,00,000 87,50,000

TOTAL TCA = Rs 255,60,000

SIMPLE MEDIAN Model (Problem-3)

For site SB (40,50)

Facility Location F1 F2 F3 20, 30 10, 40 30, 50 I Xi X* I
2040 = 20 10-40 = 30 30-40 = 10

I Yi Y* I
30-50 = 20 40-50 = 10 50-50 = 0

Di
20+20 =40 30+10 = 40 10+0 = 10

Load(Wi) 755 900 450

Ci
100 300 200

TC= DiWi Ci 30,20,000 108,00,000 9,00,000

F4

40, 60

40-40 = 0

60-50 = 10

0+10 = 10

500

250

12,50,000

TOTAL TCB = 159,70,000 So, by Simple Median Model method, we get Total Cost of Transport for site A, TCA = Rs 255,60,000 And Since, Total Cost of Transport for site B, TCB = Rs 159,70,000 TCB < TCA ,

Site SB (40, 50) is better site.

Ans

PLANT LAYOUT


1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Objective of Plant Layout :

Minimum inter process Material Handling Improved Productivity Improved Production rate by reducing Production Cycle Time. Good Flexibility of Process Sequence for various jobs or wide product-range (specially applicable for Job shop and Batch process) Better Control over Process-flow as well as Materials-flow Access to and Ease of maintenance & repair of Machineries Improved Occupational Safety Reduced WIP inventory Minimizing Capital Investment in duplication of machineries Scope / Provision for future expansion.

Plant Layout
Process Layout or Functional Layout Product Layout or Line Layout Fixed Position Cellular Layout

1 2

7 4

3
5

9
Process Layout

10

1 : Raw material Stores 2 : Foundry (for Casting) 3 : Lathe Section/shop 4 : Shaping Section/shop 5 : Milling Section/shop 6 : Drilling Section/shop 7 : Grinding & Finishing Shop 8 : Inspection 9 : Packing Section 10: Stores of Finished Product

Process Sequence :

Procure > 1 2 3 5 7 6 4 3 7 8 9 10 > delivery 3 1 2 4 A 6

5
Product Layout

A 7

10

A : Assembly/fitting

1) Process Layout :
It is characterized by keeping all similar machines or equipment (having same function) at one location or shop or section. Example: Layout based on Foundry, Lathe shop, Grinding shop, Drilling shop, Milling shop, Welding shop, Painting shop, Packing shop, stores, Inspection, Testing House, etc. Machines are arranged at their respective shop or section, according to their functions. In this type of layout jobs are moved from Shop/section to shop/section, for processing. # This type of layout is generally adopted for the industries engaged in Job-shop and Batch process production.

i) ii) iii) iv) v) vi)

Demerits of Process Layout :

Greater material handling (due to back-tracing of material flow path), leading to more cost & time Production rate is reduced (due to longer material handling) Automatic material handling is very difficult WIP Inventory becomes large Production Control and material-flow Control become difficult Need of more Production Coordination (inter-shop or inter department/section)


i) ii) iii)

Merits of Process Layout :

Less duplication of Machine or equipment, leading to less Capital investment Better Utilization of machines or equipment Greater flexibility of production (varieties of jobs can be done at a time) Better (specialized) and more efficient (with higher expertise) supervision is possible Varieties of jobs (for different job order) improves operators skill, expertise and also satisfaction. Better product quality available due to operators improved skill, specialization & expertise developed in doing same type of job / function Breakdown of one machine does not affect much the total production process.

iv)
v)

vi)

vii)

2) Product Layout :
Product Layout implies that various operations or processes on the input material or Raw material are performed in a pre-designed sequence and the equipment or machineries are located (arranged) in order of Product-Flowline (required process sequence). In this type of layout, jobs are moved from work-center to work-center, as per the process flow-line without any back-tracing of material flow-path (only forward movement and no backward movement in material-flow-path). This type of layout is generally adopted for the industries engaged in Mass production / continuous production, and Great volume Production of the same product and continuously.

i) ii)

i)

Merits of Product Layout :

Less material handling (due to no back-tracing of material flow path), reducing cost & time for production Production rate increases as the same and standard operational process at each work station is repeated continuously. Less idle-time in material handling leads to increase production. Automatic material handling is possible and is preferred. WIP Inventory becomes negligible, if production line is well balanced. Inspection, Production Control and Coordination are simple and easier Less operators skill is required, same work skill is required. Less Floor space is required as WIP inventory is negligible.

ii)
iii) iv) v) vi) vii) viii)


i) ii) iii)

Demerits of Product Layout :

More chance of duplication of Machines or equipment, leading to more Capital investment Less possibility of full utilization of machines or equipment Less or no flexibility of production process (meant only for particular product and process required for standard products) Same and repetition of (standard) jobs (no varieties of job) lead to less improvement of operators skill & expertise and more job monotony. Breakdown of even one machine may seriously affect the total production process.

iv)

v)

3) Fixed Position Layout :

This layout is adopted in case of Manufacturing less number of huge size item (like Ship building, manufacturing of huge Aircraft, etc) and in case of projects (like Launching Station for Space Craft, Missile, etc), where it is not economical and possible to move the job from work-center to work-center. Here, the huge Job is fixed at its location and the equipment / machineries / facilities and operators move from one place to another place of the job according to process requirement Demerits of Fixed Position Layout:
Requirement of High-skilled worker. Setting time of Machine & Tool is high. Poor utilization of manpower and machines. Equipment handling cost is more.

i) ii) iii) iv)


i)

Merits of Fixed Position Layout:

Various activities can be taken up simultaneously and in parallel at different locations of the job, for faster completion of job. ii) The progress of work can be regulated to a great extent by employing simultaneously same or different activities at different locations. iii) It is possible to assign (engage) more than one operator for the same operation (say drilling or grinding or painting) on the same job to reduce job completion time. iv) Progress rate can be improved highly by engaging more number of workers as and when required, since immediately after completion of the work the workers can be withdrawn without any huge compensation. v) Material Handling and cost of material handling become comparatively small and easy. vi) Total Overhead Cost is reduced to a great extent. vii) Maximum flexibility for production planning and progress

Equipment & Tool 2 5 1 Facility

JOB
4 3 3

Fixed Position Layout