MGT 214OPERATIONS MANAGEMENTCHAPTER 06Layout DecisionsPr.docx

MGT 214
OPERATIONS MANAGEMENT
CHAPTER 06
Layout Decisions
Prepared by: Ms. Dalal Bamufleh
YANBU UNIVERSITY COLLEGE
Management Science Department
© Yanbu University College
1
MCDONALD’S LOOK FOR COMPETITIVE ADVANTAGE
THROUGH LAYOUT
Slide 2
THROUGH LAYOUT
Indoor seating (1950s)
Drive-through window (1970s)
Adding breakfast to the menu (1980s)
Adding play areas (late 1980s)

Redesign of the kitchens (1990s)
Self-service kiosk (2004)
21st Century look: 3 dining sections
Slide 3
THROUGH LAYOUT
Three separate dining areas
Linger zone with comfortable chairs
and Wi-Fi connections
Grab and go zone with tall counters and with bar stools.
Flexible zone for kids and families with colorful and movable
furniture
Facility layout is a source of competitive advantage (CSF)
Slide 4
Strategic Importance of Layout Decisions
The objective of layout strategy is to develop an effective and
efficient layout that will meet the firm’s competitive needs and
requirements.
An effective layout can help
an organization achieve a strategy
that support differentiation, low cost or response.

Strategic Importance of Layout Decisions
Layout Design Considerations:
Higher utilization of space, equipment, and people
Improved flow of information, materials, or people
Improved employee morale and safer working conditions
Improved customer/client interaction
Flexibility
Layout designs needs to be
viewed as dynamic
Slide 6
Types of Layout
Office layout
Retail layout
Warehouse layout
Fixed-position layout
Process-oriented layout
Work-cell layout
Product-oriented layout
Slide 7

Good layouts requires determining the following:
Material handling equipment
Capacity and space requirements
Environment and aesthetics
Flows of information
Cost of moving between various work areas
Slide 8
Types of Layout
Office Layout
Requires the grouping of workers, their equipment, and spaces
to provide comfort, safety, and movement of information
Movement of information is main distinction
Typically in state of flux due to frequent technological changes
Electronic data and paper work
Relationship chart
Slide 9

Office Layout
Some of the universal layout considerations: working
conditions, teamwork, authority …etc
Private or open cubicles?
Slide 10
Open Cubicles
Private Cubicles
Office Layout
Private office
Low or high file cabinets
Slide 11
Office Layout
Same entrance, rest room, lockers and cafeteria for all
employees?
Two major trends:
Technology such as cell phone, iPods, faxes, Internet, and
laptop computers increase layout flexibility.

Modern firms create dynamic needs for space and services.
Slide 12
Retail Layout
Objective is to maximize profitability per square foot of floor
space
Sales and profitability vary directly with customer exposure
OM try to expose customers to as many products as possible
How to change exposure?
Slide 13
Retail Layout
Five Helpful Ideas for Supermarket Layout:
Locate high-draw items around the periphery of the store
Use prominent locations for high-impulse and high-margin
items
Distribute power items to both sides of an aisle and disperse
them to increase viewing of other items
Use end-aisle locations
Convey mission of store through careful positioning of lead-off
department
Slide 14

Retail Layout
Category Management
Slotting fees: Manufacturers pay fees to retailers to get the
retailers to display (slot) their product
Contributing factors:
Limited shelf space
Massive new products
Limit small firms ability to
expand
Slide 15
Retail Layout
Servicescapes:
Ambient conditions - background characteristics such as
lighting, sound, smell, and temperature
Spatial layout and functionality - which involve, aisle
characteristics (width, direction, shelf spacing...etc.) , and
product grouping
Signs, symbols, and artifacts - characteristics of building design
that carry social significance e.g.: Wal-Mart greeter at the door,
Disneyland's entrance
Slide 16

Warehousing and Storage Layouts
Objective is to optimize trade-offs between handling costs and
costs associated with warehouse space
Maximize the utilization of
the total “cube” of the warehouse –
utilize its full volume
while maintaining low
material handling costs
Slide 18
Material Handling Costs:
All costs associated with the transaction
Incoming transport
Storage
Finding and moving material
Outgoing transport of the materials to be warehoused
Equipment, people, material, supervision, insurance, and
depreciation
Minimize damage and spoilage

Automated Storage and
Retrieval Systems (ASRSs)
can significantly improve
warehouse productivity
Slide 20
An important component of warehouse
layout is the relationship between
the receiving/ unloading area
and the shipping/ loading area.
Slide 21
1. Cross-Docking

Materials are moved directly from receiving to shipping and are
not placed in storage
in the warehouse
Reduces distribution, inventory
and facility costs
Requires tight scheduling and
accurate product identification
e.g. bar code
Slide 22
2. Random Stocking
Typically requires automatic identification systems (AISs) and
effective information systems
Random assignment of stocking locations allows more efficient
use of space
Key tasks:
Maintain list of open locations
Maintain accurate records of existing inventory and its locations
Sequence items to minimize travel, and pick time
Combine picking orders to reduce picking time
Assign classes of items to particular areas
records
Slide 23

3. Customizing
Value-added activities performed at the warehouse
Assembly of components
Loading software
Repairs
Customized labeling and packaging
Slide 24
Fixed-Position Layout
Project remains in one place and workers and equipment come
to site
E.g.: ship, highway, bridge, house, operation room
Complicating factors
Limited space at site
Different materials required at
different stages of the project
Volume of materials
needed is dynamic
Slide 25

Fixed-Position Layout
Alternative Strategy
As much of the project as possible is completed off-site in a
product-oriented facility
This can significantly
improve efficiency but is only
possible when
multiple similar
units need to be created
Slide 26
Work Cells
Reorganizes people and machines into groups to focus on single
products or product groups
Volume must justify cells
Group technology identifies products that have similar
characteristics for particular cells
Cells can be reconfigured as designs or volume changes
Slide 27
Work Cells
Improving Layouts Using Work Cells
Slide 28

Current layout - workers in small closed areas. Cannot increase
output without a third worker and third set of equipment.
Improved layout - cross-trained workers can assist each other.
May be able to add a third worker as additional output is
needed.

U-shaped line may reduce employee movement and space
requirements while enhancing communication, reducing the
number of workers, and facilitating inspection
+
Work Cells
Improving Layouts Using Work Cells
Slide 29
Current layout - straight lines make it hard to balance tasks
because work may not be divided evenly
Improved layout - in U shape, workers have better access. Four
cross-trained workers were reduced.

U-shaped line may reduce employee movement and space
requirements while enhancing communication, reducing the
number of workers, and facilitating inspection
Process-Oriented Layout
Like machines and equipment are grouped together
Efficient when making products with different requirements, or
when handling different needs of customers
Each product requires different sequence of operations
E.g.: ER Process
Slide 30
Slide 31
Surgery
Radiology
ER triage room
ER Beds
Pharmacy
Emergency room admissions
Billing/exit
Laboratories

Patient A - broken leg
Patient B - erratic heart pacemaker
Advantages:
Flexibility
Capability of handling a wide variety of products or services
Disadvantages:
General-
required level of training and experience
Orders take more time to move through the system because of
difficult scheduling, changing setup, and unique material
handling
Slide 32

Arrange departments/ work centers so as to minimize the costs
of material handling
Material handling cost in this approach depend on:
Number of loads (or people) moving between centers
Distance-related cost of moving loads (or people) between
centers
Slide 33
Designing process- oriented layout steps:
Construct a “from-to matrix”
Determine the space requirements
Develop an initial schematic diagram
Determine the cost of this layout
Try to improve the layout
Prepare a detailed plan
Slide 34
Slide 35
Department Assembly Painting Machine Receiving
Shipping Testing
(1) (2) Shop (3) (4) (5) (6)

Assembly (1)
Painting (2)
Machine Shop (3)
Receiving (4)
Shipping (5)
Testing (6)
Department Assembly Painting Machine Receiving
Shipping Testing
(1) (2) Shop (3) (4) (5) (6)
Assembly (1) 50 100 0 0 20
Painting (2) 30 50 10 0
Machine Shop (3) 20 0 100
Receiving (4) 50 0
Shipping (5) 0
Testing (6)
Number of loads per week
Example 1:
Page: 385
1. Construct a “from-to matrix”

2. Determine the space requirements
Slide 36
Area 1 Area 2 Area 3
60’
40’
Receiving Shipping Testing
Department Department Department
(4) (5) (6)
Assembly Painting Machine Shop
(1) (2) (3)

Slide 37
3. Develop an initial schematic diagram
100
50
20
50
50
20
10
100
30
Machine Shop (3)
Testing
(6)
Shipping
(5)
Receiving
(4)
Assembly
(1)

Painting
(2)
Slide 38
4. Determine the cost of this layout
X= Number of loads
C= Cost for moving load
The cost of moving adjacent department is estimated
to be $1, and 2$ for nonadjacent departments.
Cost = ∑ ∑ Xij Cij
n
i = 1
n
j = 1
Cost = $50 + $200 + $40
(1 and 2) (1 and 3) (1 and 6)
+ $30 + $50 + $10
(2 and 3) (2 and 4) (2 and 5)
+ $40 + $100 + $50
(3 and 4) (3 and 6) (4 and 5)
= $570

Slide 39
5. Try to improve the layout
30
50
20
50
10
20
50
100
100
Machine Shop (3)
Testing
(6)
Shipping
(5)
Receiving
(4)

Painting
(2)
Assembly
(1)
Cost = 50 + (30X2) + 10 + 50 + 100 + 20 + 100 +
(20X2) +50
= $ 480
Slide 40
6. Prepare a detailed plan
60’
40’

Receiving Shipping Testing
(4) (5) (6)
Painting Assembly Machine Shop
(1) (2) (3)
Repetitive and Product-Oriented Layout
Repetitive production and continuous production use product
layout.
Two types of layout: Fabrication line and Assembly line.
Fabrication line
Builds components on a series of machines
Machine-paced
Require mechanical or engineering changes to balance
Slide 41
Repetitive and Product-Oriented Layout
Assembly line
Puts fabricated parts together at a series of workstations
Paced by work tasks
Balanced by moving tasks
Both types of lines must be balanced so that the time to perform

the work at each station is the same
Slide 42
Slide 43
END OF LECTURE
Airport
Album
Alphabet
Apple
Arm
Backpack
Balloon
Barbecue
Bird
Book
Bowl
Brain
Bridge
Cappuccino
Chief
Chocolates
Clock
Clown
Coffee
Computer
Drill

Drink
Electricity
Elephant
Eraser
Family
Film
Finger
Floodlight
Flower
Fruit
Garden
Gemstone
Grapes
Guitar
Highway
Insect
Junk
Kitchen
Knife
Library
Liquid
Magnet
Microscope
Milkshake
Monster
Necklace
Needle
Onion
Parachute
Passport
Pebble
Potato
Printer
Prison
Pyramid
Radar

Ring
Robot
Rocket
Sandpaper
Sandwich
Shower
Signature
Skeleton
Shuttle
Spectrum
Sunglasses
Tapestry
Teeth
Telescope
Television
Thermometer
Train
Treadmill
Triangle
Vacuum
Vampire
Videotape
Window
SP15
Project #2
Hangman Game
Uploads: Due by 9:00am
Paperwork: Due by 9:00 am – Drop off at Burke 154 or the
School of Engineering office, Burke 242
Objective: Write an interactive program that plays the game
Hangman. Use the random integer function to randomly select

the word to guess out of the file provided. The player must
guess the letters belonging to the word. The program should
terminate when either all letters have been guessed correctly
(player wins) or a specified number of incorrect guesses have
been made (computer wins). Use a solution array to keep track
of the solution so far. Initialize the array to a string of ‘*’. Each
time a letter in the word is guessed, replace the corresponding
‘*’ with that letter.
1. Each part of the program should be its own function. Such as
recording the guess, keeping track of the solution, etc. (Hint: A
menu might be a good way to do this.)
2. Also – display on the screen what letters of the alphabet you
have used so far and where you are in the solution.
3. 6 incorrect guesses will be allowed.
4. Use the data file of 80 words on Angel to randomly select a
word to solve.
5. The data file name and location MUST BE:
P:Privatewordlist.txt. If you change this or do not go to this
location, your program will be graded as not running.
6. No global variables.
What are you turning in?
1. A printout of your original source code.
2. A printout of you playing the game at least twice. Once with
a win and one time with a lost.
3. All project files should have your Penn State ID in the name.
For example, P2mrf11.cpp.
4. Upload all of your files to the drop box on Angel BEFORE
the deadline.
5. If you neglect to either upload your file or turn in your
paperwork, you will get a zero for the assignment.
6. At this time, this project will be worth 10% of the project
grade. Project 1 will be recorded as 15%. Class grades will be
evaluated after these projects are graded. The instructor will
post any changes on Angel for the class.

Graded on:
·
· Good programming
· Neat & readable code
· Comments
· Logic
· Calculations
· Meaningful variables
· Output – results & format
· Input – prompting & use
· Functions
· Arrays
· Data files
· Does it work?
· Other
Reference: Problem Solving, Abstract and Design Using C++ by
Friedman & Koffman.
Assignment II Cover Sheet
MANAGEMENT SCIENCE DEPARTMENT
STUDENTS DETAILS
Student Name
1. Sithy Zubaidah Habib
Student ID

12129009
2. Arwa Abdulkareem Alalwni
12120051
INSTRUCTION FOR SUBMISSION OF HARD COPY (PRINT)
ASSIGNMENTS
1. Read and sign your cover sheet.
2. Attach this sheet to the front of your assignment.
3. Your assignment should be submitted to the relevant lecturer.
ASSIGNMENET DETAILS
Program Name
BS in Management Information Systems
BS in Business Management
BS in Accounting
Course Code
MGT 214
Course Name
Operations Management
Assignment/Project
Assignment 2
Lecturer’s Name
Ms. Dalal Bamufleh
Due Date
December 11, 2014
Date submitted
REQUEST FOR EXTENSION
All work must be submitted by the due date. An application to
extend the due date on the basis of special consideration must
be authorized by the course lecturer.
Extension granted until (date)
N/A
Lecturer’s Signature
Remarks:

Cheating and assisting to cheat are offences under the Yanbu
University College’s policy.
STUDENTS’ STATEMENT
We have read and understood the information provided on this
assignment cover sheet and in the college’s policy relating to
cheating and assisting to cheat, collaboration and plagiarism. I
certify that the attached work is entirely my own except where
work quoted is duly acknowledged in the text; that I have not
worked with another person or persons except where
specifically permitted by the lecturer, and that this work has not
been submitted for assessment by myself or any other person in
any other time. I have retained a copy of my work.
Students’ Signatures
Date
Mark/Grade
Assessed by & Date
Nike is a well known successful manufacturer of sport wear.
They have implemented many strategies in order to make
themselves successful. One of these strategies is through their
store layout. Nike, Tokyo store is a good example that shows
how their store layout helps in achieving the success as will be
explained below.
First, we will focus on the architecture of the building. Shown
below is a picture of Nike’s store in Tokyo.
By having full glass windows, it shows people the inside of the
store which attracts and enhances customers to enter the store.
They even take advantage of manipulating the lighting and
turned it into a piece of art as it adds visual effects to the
building. They put their logo on the side of the building to no
affect the overall look of the front of the building. In this way,

the building looks professional from the side and attractive from
the front.
As we enter the building, you feel an immediate sense of
comfort and coziness due to inside lightings which is neither
too bright nor too dark. In addition, they use extra light to focus
on exposing their products to customers.
Nike understands that attracting customers will generate more
investment or sales for them. Therefore, they designed their
stores in order to make it as attractive as possible.
Lines attached on the floor gives an athletic feeling to the
customers.
The aisles are wide enough to make the customers feel
comfortable to walk and browse.
The customer service desk is in the centre of the store, making
them near customers whenever help is needed.
Benches are available to help customers try on different shoes
easily. These benches are also located in front of customer
service desk so customers can get help easily whenever it is
needed.
They have wide stairs making it suitable for customers to walk
up and down the stairs without bumping into each other. They
also painted white lines on both ends of the stairs making it
appear wider. They designed their stairs with side glass so that
customers are exposed to all products available in all shelves as
they walk up the stairs. The side glass also matches up with the
architecture of the whole building. They also hung up shoes
above the stairs in order to complete the whole design.
They designed their shelves in different ways as shown below.

Some shelves are designed/made in a circle shape. They are
even made with different materials such as glass, wood, etc.
There are even shelves attached to windows attracting
customers from the inside as well as from the outside.
As it is known, they follow mass customization process; they
have a section named “Customize Your Own” with different
colors and models of shoes. Here customers are able to modify
their shoes according to their preference or likes.
In a part of their store, Nike has a mysterious entrance named
“BOOTROOM” that attracts customers to see what it leads to.
As they enter, they face a spiral staircase that opens up to a
whole new category of their store. Nike not only sell shoes, but
they also sell sportswear limited to famous teams.
As the customers reach the top of the stairs, they are surrounded
with mannequins of famous players exposed with excessive
lighting from the top and bottom focused on these mannequins.
As shown in the picture below, they designed a whole wall by
using famous athletes to promote their products. Every player is
used in promoting a certain type or model of product. This is
done by having sections devoted to each player with products
surrounding them.
As mentioned before, they add sports spirit everywhere. As a
result, they attached a green carpet on the borders of the floor
that looks like grass from the sports field. This brings out the
sports spirit even more as customers feel like they are actually
in the field.

As we mentioned in this floor, Nike also sells sportswear, so
they placed little cabinets to show these folded T-shirts from
different teams. These folded T-shirts are shown from the side
of the cupboard and from the top. This is so that the customers
can view it from different places of the store. Just like other
products, they define themselves in these T-shirts by attaching
their logo.
They designed these cabinets in front of a wide attractive paint
that’s surronded by a wooden wall and exposed by extra light.
That attrcative paint is NIKE’s Flag Ship that are shown in a
bright color that can’t be easily forgetten in customer’s
memories.
Finally, Nike conveys their mission using their layout in a very
unique and artistic design as shown below.
By now, we learnt that Nike puts their value in each and every
product as well as their building. They also use shoes as a main
part of their design such as, background of their mission, the
centerpiece of the stairs, background of their computer’s
screens, and as a showpiece on windows for outside customers.
References: All photos are taken from the website below, and
analyzed by the students.

http://retaildesignblog.net/2011/06/13/nike-harajuku-by-
wonderwall-tokyo/
Page 2 of 15
Assignment Cover Sheet
MANAGEMENT SCIENCE DEPARTMENT
STUDENT DETAILS
Student Name
1.
Student ID
2.
3.
INSTRUCTION FOR SUBMISSION OF HARD COPY (PRINT)
ASSIGNMENTS
1. Read and sign your cover sheet.
2. Attach this sheet to the front of your assignment.

3. Your assignment should be submitted to the relevant lecturer.
ASSIGNMENET DETAILS
Program Name
BS in Management Information Systems
BS in Business Management
BS in Accounting
Course Code
MGT 214
Course Name
Operations Management
Assignment/Project
Assignment 2
Lecturer’s Name
Ms. Dalal Bamufleh
Due Date
30/ April / 2014
Date submitted
REQUEST FOR EXTENSION
All work must be submitted by the due date. An application to
extend the due date on the basis of special consideration must
be authorized by the course lecturer.
Cheating and assisting to cheat are offences under the Yanbu
University College’s policy.
STUDENT’S STATEMENT
I have read and understood the information provided on this
assignment cover sheet and in the college’s policy relating to
cheating and assisting to cheat, collaboration and plagiarism. I
certify that the attached work is entirely my own except where
work quoted is duly acknowledged in the text; that I have not
worked with another person or persons except where
specifically permitted by the lecturer, and that this work has not
been submitted for assessment by myself or any other person in

any other time. I have retained a copy of my work.
Students Signature
Date
Mark/Grade
Assessed by & Date
THE COVER PAGE SHOULD CARRY THE FOLLOWING:
· Name and logo of the University College
· Program title
· Subject code and title
· Name of lecturer
· Name and ID of every member of your group (maximum
THREE students in a group)
· Date of submission
THE ASSIGNMENT MUST BE:
· Submitted as a hard copy on time (late assignments will be
rejected)
· Type written
· Include all Headings
· Edited for typo and grammatical errors
· Left and right alignment of 2 cm
· 1.5 spacing
· Font size - 11
· Lettering – Times New Roman
· Paragraphing – 2 spaces
OBJECTIVES:
CLO
PLO

Total marks
Marks awarded
6
AS6
30
6
IT3
(Formatting)
05
TOTAL MARK AWARDED
35
ASSIGNMENT DESCRIPTION:
Step 1. Select a company/organization to analyze its layout
decisions. (E.g.: Hospital, Polyclinic, Shop, Hypermarket,
Supermarket, University, Beauty salon, charitable organization
…etc.) We have analyzed Hyper Panda and McDonald’s layout
during layout lectures, so DON’T choose them.
Step 2. If your group decides to take photographs by yourself,
you need to use the permission letter (Please refer to page 4)
and write the selected company name and group member
information in the correct spaces. Then, print and submit it to
Ms. Dalal for signature. However, if you decide to use
photographs from internet (recommended), you don’t need for
permission letter.
Step 3. Analyze the layout of the selected company’s

photographs in details and recommend changes that can improve
the performance as an operation manager.
Step 4. Submit the assignment (hardcopy).
NOTES:
1- You need to include and analyze at least 10 photos.
2- You must write all references if any. Absence of references
will be considered plagiarism. Assignment suspected of
plagiarism, copying or cheating will be awarded 0 marks. No
chance to re-do the assignment will be given.
RUBRICS:
Categories
90-100%
(Level 4)
80 -89%
(Level 3)
70-79%
(Level 2)
60 - 69%
(Level 1)
Analytical Skills (AS6)
Demonstrates a sophisticated understanding of the topic(s) and
issue(s).
Presents an insightful and thorough analysis of all issues
identified and demonstrates complete command of the strategic
concepts and tools studied.
Demonstrates an accomplished understanding of the topic(s) and
issue(s)
Presents a thorough analysis of most issues identified and
demonstrates good command of the strategic concepts and tools
studied.

Demonstrates an acceptable understanding of the topic(s) and
issue(s)
Presents a superficial analysis of some of the issues identified
and demonstrates limited command of the strategic concepts and
tools studied.
Demonstrates an inadequate understanding of the topic(s) and
issue(s)
Presents an incomplete analysis of the issues identified and
makes little or no connection between the issues identified and
the strategic concepts studied in the reading.
Information Technology
(IT 3)
Systematic and orderly
Fairly systematic and orderly
Satisfactory in organizing
Messy and disorganized
Kingdom of Saudi Arabia
‫ة‬ ‫عودي‬ ‫س‬ ‫ال‬ ‫ية‬ ‫عرب‬ ‫ال‬ ‫كة‬ ‫ل‬ ‫مم‬ ‫ال‬
Royal Commission at Yanbu
‫ية‬ ‫ك‬ ‫ل‬ ‫م‬ ‫ال‬ ‫ئة‬ ‫ي‬ ‫ه‬ ‫عال‬ ‫ب‬ ‫ن‬ ‫ي‬
University College (Women's Campus)
‫ية‬ ‫ع‬ ‫جام‬ ‫ال‬ ‫ية‬ ‫ل‬ ‫ك‬ ‫ال‬- )‫نات‬ ‫ب‬ ‫ال‬ ‫رم‬ ‫(ح‬ ‫ع‬ ‫ب‬ ‫ن‬ ‫ي‬
Yanbu Al-Sinaiyah

‫ية‬ ‫ناع‬ ‫ص‬ ‫ال‬ ‫ع‬ ‫ب‬ ‫ن‬ ‫ي‬
Dear Sir,
With due respect, I am writing to request your permission to
allow my students, whose names are listed below, to take
photographs of <Write the company name here> layout. Taking
photographs is for the purpose of educating students in which
they will apply the concepts that they learn in real life example.
It will help them to analyze the layout and recommend what can
be done to improve the performance.
I would appreciate your cooperation.
Sincerely,
Ms. Dalal Bamufleh
Signature: ________________
Instructor - Department of Management Science
Yanbu University College
Tel: 04-321-0000 ext.: 1883
[email protected]
Student Name
ID
1.
2.
3.

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