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Capacity and Facility layout
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Capacity
Maximum capability to produce Capacity planning establishes overall level of
productive resources for a firm 3 basic strategies for timing of capacity
expansion in relation to steady growth indemand ( lead, lag, and average )
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Capacity Expansion Strategies
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Capacity
Capacity increase depends on volume and certainty of anticipated demand strategic ob ectives costs of expansion and operation
!est operating level " of capacity utili#ation that minimi#es unit costs
Capacity cushion (support) " of capacity held in reserve for unexpected
occurrences
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Economies of Scale
$nit cost decreases as output volume increases fixed costs can be spread over a larger number ofunits
production or operating costs do not increase linearlywith output levels
%uantity discounts are available for materialpurchases
operating efficiency increases as wor&ers gainexperience
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Best Operating Level for a Hotel
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'acility ayout( ayout planning)
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b ectives of 'acility ayout
Minimi#e material*handling costs $tili#e space efficiently $tili#e labor efficiently
Eliminate bottlenec&s 'acilitate communication and interaction +educe manufacturing cycle time
+educe customer service time Eliminate wasted or redundant movement
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b ectives of 'acility ayout
'acilitate entry, exit, and placement of material,products, and people
-ncorporate safety and security measures
.romote product and service %uality Encourage proper maintenance activities .rovide a visual control of activities
.rovide flexibility to adapt to changing conditions
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!asic ayouts
.rocess layouts group similar activities together according to process
or function they perform
.roduct layouts arrange activities in line according to se%uence of
operations for a particular product or service
'ixed*position layouts are used for pro ects in which product cannot be
moved
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.rocess ayout in Services
/omen0sformal dresses
/omen0s casualdresses
/omen0ssportswear
Shoes
Cosmetics and ewelry
Entry and displayarea
1ousewares
Children0sdepartment
Men0sdepartment
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Manufacturing .rocess ayout
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2 .roduct ayout
-n
ut
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escription
4ype of process
.roduct
emand
5olume
Sequentialarrangement ofactivitiesContinuous, massproduction, mainlyassembly
Standardized,
made to stockStable
High
ProcessFunctionalgrouping ofactivitiesIntermittent, batchproduction, mainlyfabrication
Varied, made to
orderFluctuating
Low
Product
Comparison of .roductand .rocess ayouts
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-nventory
Storage space Material handling 2isles(passage) ayout decision 6oal
ow in*process, highfinished goodsSmall'ixed path (conveyor)7arrow
ine balancingE%uali#e wor& at each
station
Process
1igh in*process, lowfinished goods
arge5ariable path (for&lift)/ideMachine locationMinimi#e material
handling cost
Product
Comparison of .roductand .rocess ayouts
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'ixed*.osition ayouts
4ypical of pro ects 'ragile, bul&y, heavy items E%uipment, wor&ers 8 materials brought to site ow e%uipment utili#ation 1ighly s&illed labor 4ypically low fixed cost ften high variable costs
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esigning .rocess ayouts
6oal9 minimi#e material handling costs Block Diagramming minimi#e nonad acent loads use when %uantitative data is available
Relationship Diagramming based on location preference between areas use when %uantitative data is not available
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!loc& iagramming
$nit load %uantity in whichmaterial is normallymoved
7onad acent load distance farther
than the next bloc&
Steps create load summary chart calculate composite (two
way) movements
develop trial layoutsminimi#ing number ofnonad acent loads
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!loc& iagramming9 Example
epartment : ; 3 < =
oad Summary Chart'+ M>4 E.2+4ME74
: ? :@@ =@; ? ;@@ =@3 A@ ?
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!loc& iagramming9 Example
; 3 ;@@ loads; < :=@ loads: 3 ::@ loads: ; :@@ loads< = A@ loads
3 = =@ loads; = =@ loads3 <
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!loc& iagramming9 Example
; 3 ;@@ loads; < :=@ loads: 3 ::@ loads: ; :@@ loads< = A@ loads3 = =@ loads
; = =@ loads3 <
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!loc& iagram type of schematic layout diagramD includes space re%uirements
:;
3
hour)
(:;@ units)
Cd < minutes
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'low 4ime vs Cycle 4ime
Cycle time max time spent at any station 'low time time to complete all stations
: ; 3
< minutes < minutes < minutes
'low time < B < B < :; minutesCycle time max (
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ine !alancing .rocedure
:I raw and label a precedence diagram;I Calculate desired cycle time re%uired for line3I Calculate theoretical minimum number of wor&stations
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ine !alancing
@I:
@I;
@I
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