Chapter 9.docx

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University of Guelph
Food Agricultural and Resource Economics
FARE 3310
Jamie Gruman

Chapter 9– Layout Strategies Types of Layout 1.Office layout -grouping of workers, equipment and spaces to provide comfort, safety, and movement of info -maximizes information flows (movement of information is main distinction) -locate workers requiring frequent contact close to one another -typically in state of flux (change) due to frequent technological changes 2.Retail layout- allocates shelf space and responds to customer behavior -maximizes (high margin) product exposure (maximize profitability per square foot of floor space) -expose customer to high-margin items -sales and profitability vary directly with customer exposure -helpful ideas for supermarket layout: -locate high-draw items around periphery of 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 -retail slotting: -manufactures pay fees to retailers to get retailers to display (slot) their product -contributing factors: limited shelf space, increasing number of new products, better information about s ales through POS data collection, closer control of inventory 3.Warehouse layout- addresses tradeoffs between space and material handling -optimizes trade-offs between storage space and material handling -balance low-cost storage with low cost material handling -maximize utilization of the total cube of the warehouse (utilize its full volume while maintaining low material handling costs(all costs related to transaction-incoming transport: storage, finding and moving material, outgoing transport: equipment, people, material, supervision, insurance, depreciation)) -minimize damage and spoilage of material within warehouse 4.Fixed-position layout- addresses the layout requirements of large, bulky projects such as ships and buildings -minimizes material handling costs within the constraints of limited space at the site -move material to limited storage areas around the site -techniques for addressing fixed-position layout are complicated by three factors: -limited space at all sites -different materials required at different stages of the project -volume of materials needed is dynamic 5.Process-oriented layout- deals with low-volume, high variety production (also called: job shop/ intermittent production) -minimizes travel distances times (x) the number of trips between departments -manage varied material flow for each product -advantages are: flexibility in equipment and labour assignments, and its capable of handling, a wide variety of products or services -scheduling can be difficult and setup, material handling and labour costs can be high -most common tactic is to arrange work centers so as to minimize the costs of material handling which includes: -number of loads (or people) moving between centers( -distance loads (or people) move between centers -cost is assumed to be function of distance between departments -cost minimizing objective of the process-oriented layout can be expressed as: Example-an operation manager wants to arrange six departments of its factory to minimize material handling costs. Each department is 20x20 feet and the building is 60 feet long and 40 feet wide. The cost of moving one load between adjacent departments is estimated to be $1. Moving a load between nonadjacent departments is $2. Construct a from-to matrix Determine the space requirements Develop initial schematic diagram Determine cost of this layout Prepare detailed plan 6.Work cell layout- arranges machinery and equipment to focus on production of a single product or group of related products -minimizes material travels and adjust imbalances with cross trained personnel -identify a product family, build items, cross train team members -advantages: -reduced work-in-progress inventory -less floor space required -reduced raw material and finished goods inventory -reduced direct labour -heightened sense of employee participations -increased use of equipment and machinery -reduced investment in machinery and equipment -requirements of work cells -identification of families and products -high level of training, flexibility and empowerment and resources -being self-contained with its own equipment and resources -test (poka-yoke) at each station in the cell Determine ta
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