Part of Operation Management

1. Topic- Plant Location and Layout
Ruturaj Bhopatrao - 04
Krutika Pachauri - 29
Rahul Kumar – 34
Amit Sakore - 36
Aathira Sugathan - 38
Operations Management Presentation.

2. What is Plant Location?
•Plant location refer to the choice of
region and the selection of a particular
site for setting up a business or factory
•An ideal location is the one where the
cost of the product is kept to the
minimum, with large market share, the
least risk and the maximum net
advantage or which gives lowest unit
cost of production and distribution.

3. Need for Selection of Location
Need for
selection of
location.
Starting new
organization.
Existing
organization.
Global Location
There are three situations that affect the selection of the location:

4. Importance for Plant Location
Location are important because of following factors:-
1. Fixation of the production technology and the cost structures.
2. Determine nearness of location from the market.
3. Better service to the customers.
4. Withstand Competition.
5. Select the best location.

5. Types Of Facility Location
1. Single facility location
2. Multi-Facility location

6. Factors Responsible For Facility Location Decision
• Dominant Factors
• Availability of Raw materials
• Favorable Labour Climate
• Proximity to Markets
• Quality of Life
• Safety Requirements
• Utilities , Taxes and Real Estate Cost
• Secondary Factors
• Dominant factors
• Proximity to customers
• Ecological and environmental factors
• Transportation costs and proximity to markets
• Location of competitors
• Secondary factors
In Manufacturing Operations In Service Operations

7. In Manufacturing Operations:
Dominant factors: Factors determining location decisions for new
manufacturing plants can be broadly classified as under.
• Availability of Raw Materials: Areas where industrial raw
materials are easily available obviously exert greater pull on
location of industrial undertaking.
• Favorable Labour Climate: It includes wage rates, training
requirements, worker productivity & union strength
• Proximity to Markets: After determining where the demand for
goods and services is greatest, management must select
location for the facility that will supply that demand.
• Quality of Life: Good school, recreational facilities, cultural
events and an attractive lifestyle contribute to quality of life.

8. • Utilities, Taxes And Real Estate Costs: Utility cost (
telephone, energy and water), local and state taxes, relocation
costs and land costs.
• Safety Requirements: Nuclear power stations, chemical and
explosives factories are often considered dangerous to the
surroundings neighborhoods
 Secondary Factors: Construction costs, accessibility to multiple
modes of transportation, competition from other firms from other
firms for the workforce, community attitudes and many others.

9. In Service Operations:
Dominant Factors: Customers usually look about how close a service facility
is, particularly if the process requires considerable customer contacts.
• Proximity To Customers: Key factor in determining how
conveniently customers can carry on business with a firm.
• Ecological And Environmental Factors: Take care about Air,
water and noise pollution. Installing noise absorbers.
• Transportation Costs and Proximity To Markets: With a
warehouse nearby, many firms can hold inventory closer to the
customer thus reducing delivery time and promoting sales.
Secondary Factors: Retailers must consider the level of retail
activity, residential density, traffic flows and site visibility.

10. Techniques of Facility Location
Techniques
Factor-rating System
Weighted factor rating method
Locational break even analysis
Transportation method of linear programming
Simple median model
Load distance method
Centroid Method. (Centre of gravity)
Minimax Method

11. THANKYOU!!!