• ### Unit 7: Facility Analysis – Location and Layout Planning

This unit covers the analysis of facility layouts, given layout objectives and types. Different requirements for manufacturing and service-industry building layouts are considered. Location decisions include analyzing the link between supply-chain networks and facility locations as part of operations optimization.

Completing this unit should take you approximately 6 hours.

• ### 7.1: Criteria for Location Selection

When seeking a location for production and manufacturing there are many strategic physical and human considerations. Some physical aspects can include available infrastructure, geographical location, ease of access for transporting goods and materials, environmental conditions, and expandability. In regard to personnel, the community, available labor, talent pools, and political landscape must also be factored into decision-making.

• ### 7.1.1: Factor Rating System

The factor rating system analysis begins with identifying specific criteria and then assigning weight to each factor based on importance. It is useful for evaluating one alternative in comparison to other alternatives especially for selecting a location. This evaluation can include both quantitative and qualitative inputs in its analysis.

• ### 7.1.2: Cost-Profit-Volume Analysis

Cost-profit-volume analysis, also known as a break-even analysis, uses costs, volume, and profit to calculate how much income a firm will need to earn to recoup costs and earn a profit. Fixed costs are constant. However, variable costs can be challenging to predict, which may increase uncertainty in the analysis outcome. Furthermore, assumptions in this analysis can result in unrealistic predictions and projections.

• ### 7.1.3: Linear Programming Transportation

Linear programming is often used to address problems where no exact solution is known such as in transportation and logistics. This method deals with finding optimal solutions that are described with linear equations and are not necessarily useful in finding a practical solution. Conducting this analysis helps a business understand how to minimize transportation-related problems increasing profits over time.

• ### 7.1.4: The GIS/Centroid Method

The Geographical Information System (GIS) Centroid method is an analysis that represents the center or single point of a spatial unit. It identifies geographical centers or population centers in an effort to minimize total distances. For manufacturers, this is a key tool to understand their physical proximity to suppliers and buyers in an effort to minimize transportation time and distance.

• ### 7.2: Facility Layout Objectives

Once a site has been selected, designing the layout of the facility must be approached thoughtfully and strategically. Planning should be centered around the product to be manufactured, quantity, speed, and demand. Ultimately, the highest priority is ensuring that production is efficient and effective so performance goals can be achieved.

• ### 7.2.1: Classifying Layouts

Production facilities have many moving parts; as a result, problems will surely arise. These problems can be related to machinery, human, technological, or environmental factors. Operations managers need to resolve these problems as quickly as possible to minimize disruption upstream and downstream of the production.

• ### 7.2.2: Layout Problems

The nature of a business will determine the layout most conducive to optimal operations. Since this will be a mostly permanent buildout, it is crucial to analyze and accurately predict the most efficient use of space before starting production. Other than machine placement, spacing between workstations, aisles, and placement of restrooms, breakrooms, and even offices need careful consideration to contribute to production optimization.

• ### 7.3: Manufacturing-Facility Layouts

A facility layout is the arrangement of everything needed to produce a good or deliver a service. Food processing in the manufacturing sector has unique challenges because of the raw input materials and a defined shelf life output. Production processes are a major concern, as are personal hygiene and food contamination.

• ### Study Guide: Unit 7

We recommend reviewing this Study Guide before taking the Unit 7 Assessment.