Professional Documents
Culture Documents
Location
and Layout
Foundations of Operations Management, Canadian Edition
Ritzman, Krajewski, Klassen 2004 Pearson Education Canada Inc.
Other Languages
Different Norms and Customs
Workforce Management
Unfamiliar Laws and Regulations
Unexpected Cost Mix
Foundations of Operations Management, Canadian Edition
Ritzman, Krajewski, Klassen 2004 Pearson Education Canada Inc.
7-2
7-3
Proximity to Customers
Transportation Costs & Proximity to
Markets
Location of Competitors
Site-Specific Factors
7-4
Location
Erie
Weighted Score
Location Factor
North
Health-Watch
Scranton
Weight
Score
WS patient
= (25 x 4)
Total
miles per month
25
4
State College
Facility utilization
20
3
Pittsburgh
Average time per emergency trip
20
3
Harrisburg
Expressway accessibility
15
4
Philadelphia
Land andUniontown
construction costs
10
1
Employee preference
10
5
Example 7.1
Foundations of Operations Management, Canadian Edition
Ritzman, Krajewski, Klassen 2004 Pearson Education Canada Inc.
7-5
Location
Erie
Weighted Score
Location Factor
North
Health-Watch
Scranton
Weight
Score
WS patient
= (25 x 4)
+ (20
x 3)
Total
miles
per
month
25
4
State College
Facility utilization
20
3
Pittsburgh
Average time per emergency trip
20
3
Harrisburg
Expressway accessibility
15
4
Philadelphia
Land andUniontown
construction costs
10
1
Employee preference
10
5
Example 7.1
Foundations of Operations Management, Canadian Edition
Ritzman, Krajewski, Klassen 2004 Pearson Education Canada Inc.
7-6
Location
Erie
Weighted Score
Location Factor
North
Health-Watch
Scranton
Weight
Score
WS patient
= (25 x 4)
+ (20
x 3)
+
Total
miles
per
month
25
4
State College
x 3)
Facility (20
utilization
20
3
Pittsburgh
Average time per emergency trip
20
3
Harrisburg
Expressway accessibility
15
4
Philadelphia
Land andUniontown
construction costs
10
1
Employee preference
10
5
Example 7.1
Foundations of Operations Management, Canadian Edition
Ritzman, Krajewski, Klassen 2004 Pearson Education Canada Inc.
7-7
Location
Erie
Weighted Score
Location Factor
North
Health-Watch
Scranton
Weight
Score
WS patient
= (25 x 4)
+ (20
x 3)
+
Total
miles
per
month
25
4
x 3) + (15 x 4) + State College
Facility (20
utilization
20
3
Pittsburgh
(10
x 1)per
+ (10
x 5)
Average time
emergency
trip
20
3
Harrisburg
Expressway accessibility
15
4
Philadelphia
Land andUniontown
construction costs
10
1
Employee preference
10
5
Example 7.1
Foundations of Operations Management, Canadian Edition
Ritzman, Krajewski, Klassen 2004 Pearson Education Canada Inc.
7-8
Location
Erie
Weighted Score
Location Factor
North
Health-Watch
Scranton
Weight
Score
WS patient
= 340 miles per month
Total
25
4
State College
Facility utilization
20
3
Pittsburgh
Average time per emergency trip
20
3
Harrisburg
Expressway accessibility
15
4
Philadelphia
Land andUniontown
construction costs
10
1
Employee preference
10
5
Example 7.1
Foundations of Operations Management, Canadian Edition
Ritzman, Krajewski, Klassen 2004 Pearson Education Canada Inc.
7-9
Health-Watch
North
6
Location
(5.5, 4.5)
[10]
C
E
A
(8, 5)
[10]
(2.5, 4.5)
4
Census
Population
Census
Population
[2]
Tract
(x,
(l)
lx
Tract
(x, y)
y)
(l)
lx
3
B
A
(2.5,
5
A
(2.5, 4.5)
4.5) G 22
F 2.5)
DB
(2.5,
55
(2.5, 2.5)
B
(2.5,
2.5) (9, 2.5)
12.5
2
[5]
(5,C
4.5)
10
C2) (5.5,
(5.5,
4.5) [14]
10
55
(7, 2)
[7]
[20]
D
(5,
77
D
(5, 2)
2)
35
1
E
(8,
10
E
(8, 5)
5)
10
80
FF
(7,
20
(7, 2)
2)
20
140
0
1 2 3 4 G
5G 6 (9,
7 2.5)
8 9 14
10
(9,
2.5)
14
126
x (miles)
East 453.5
Totals
Example 7.2
Foundations of Operations Management,
Canadian68
Edition
y (miles)
ly
ly
9
12.5
45
14
50
40
35
205.5
7-10
Location
Health-Watch
y (miles)
(5.5, 4.5)
[10]
E
5
C
A
(8, 5)
453.5
Census
Population
[10]
(2.5,
4.5)
x* =
4
68lx
Tract
(x,
y)
(l)
[2]
A
(2.5, 4.5)
2
5
3
B
B
(2.5, 2.5) G 5 205.5
12.5
F 4.5) y* =
DC
(2.5, 2.5)
(5.5,
10
55
(9, 2.5)
2
68
[5]
(5,D2)
[14]7
(5,2)
2)
35
(7,
[7]
[20]
E
(8, 5)
10
80
1
F
(7, 2)
20
140
G
(9, 2.5)
14
126
0
1 2 3 4 5 6 7 Totals
8 9 68
10
453.5
x (miles)
East
Example 7.2
Foundations of Operations Management, Canadian Edition
Ritzman, Krajewski, Klassen 2004 Pearson Education Canada Inc.
ly
9
12.5
45
14
50
40
35
205.5
7-11
Location
Health-Watch
y (miles)
(5.5, 4.5)
[10]
E
5
C
A
(8, 5)
Census
Population
[10]
(2.5,
4.5)
x* = 6.67
4
Tract
(x,
y)
(l)
lx
[2]
A
(2.5, 4.5)
2
5
3
B
B
(2.5, 2.5) G 5
12.5
F 4.5) y* =
DC
(2.5, 2.5)
(5.5,
10 3.02 55
(9, 2.5)
2
[5]
(5,D2)
[14]7
(5,2)
2)
35
(7,
[7]
[20]
E
(8, 5)
10
80
1
F
(7, 2)
20
140
G
(9, 2.5)
14
126
0
1 2 3 4 5 6 7 Totals
8 9 68
10
453.5
x (miles)
East
Example 7.2
Foundations of Operations Management, Canadian Edition
Ritzman, Krajewski, Klassen 2004 Pearson Education Canada Inc.
ly
9
12.5
45
14
50
40
35
205.5
7-12
Location
Health-Watch
North
6
5
A
(2.5, 4.5)
[2]
4
y (miles)
(5.5, 4.5)
[10]
C
B
D
(5, 2)
[7]
1
1
Example 7.2
= 6.67
(2.5, 2.5)
[5]
E
(8, 5)
[10]x*
y*2.5)
= 3.02
(9,
[14]
F
(7, 2)
[20]
5 6 7
x (miles)
10
East
7-13
Location
Break-Even Analysis
for 20,000 units
Community
Fixed Costs
per Year
A
B
C
D
$150,000
$300,000
$500,000
$600,000
Variable Costs
Total Costs
per Unit
(Fixed + Variable)
$62
$38
$24
$30
$62 (20,000)
7-14
Location
Break-Even Analysis
for 20,000 units
Community
Fixed Costs
per Year
A
B
C
D
$150,000
$300,000
$500,000
$600,000
Variable Costs
Total Costs
per Unit
(Fixed + Variable)
$62
$38
$24
$30
$1,390,000
7-15
Community
Fixed Costs
per Year
Total Costs
(Fixed + Variable)
$150,000
$300,000
$500,000
$600,000
$1,390,000
$1,060,000
$ 980,000
$1,200,000
A
B
C
1600
D
Location
Break-Even Analysis
A
(20, 1390)
1400
(20, 1200)
1200
D
B
C
(20, 1060)
1000
(20, 980)
800
600
Break-even
point
400
200
0
Figure 7.1
A best
2
10 12 14
16 18 20 22
Q (thousands of units)
Foundations of Operations Management, Canadian Edition
Ritzman, Krajewski, Klassen 2004 Pearson Education Canada Inc.
7-16
Community
A
B
C
1600
D
Fixed Costs
per Year
Total Costs
(Fixed + Variable)
$150,000
$300,000
$500,000
$600,000
$1,390,000
$1,060,000
$ 980,000
$1,200,000
Location
Break-Even Analysis
A
(20, 1390)
1400
(20, 1200)
1200
D
B
C
(20, 1060)
1000
(20, 980)
800
Break-even point
600
Break-even
point
400
200
0
Figure 7.1
A best
2
B best
6
8
6.25
10 12 14 16 18 20 22
14.3
of units)Canadian Edition
FoundationsQ
of(thousands
Operations Management,
Ritzman, Krajewski, Klassen 2004 Pearson Education Canada Inc.
7-17
Community
A
B
C
1600
D
Fixed Costs
per Year
Total Costs
(Fixed + Variable)
$150,000
$300,000
$500,000
$600,000
$1,390,000
$1,060,000
$ 980,000
$1,200,000
Location
Break-Even Analysis
A
(20, 1390)
1400
(20, 1200)
1200
D
B
C
(20, 1060)
1000
(20, 980)
800
Break-even point
600
Break-even
point
400
200
0
Figure 7.1
A best
2
B best
6
8
6.25
C best
10 12 14 16 18 20 22
14.3
Q (thousands of units)
7-18
Location
Annual cost (thousands of dollars)
Break-Even Analysis
1600
A
(20, 1390)
1400
(20, 1200)
Break-Even Quantities
1200
(20, 1060)
1000
(A)
800
Break-even
(B)
point
400
0
Figure 7.1
(B)
(20, 980)
600
200
D
B
C
(C)
6
8
6.25
10 12 14 16 18 20 22
14.3
of units)Canadian Edition
FoundationsQ
of(thousands
Operations Management,
Ritzman, Krajewski, Klassen 2004 Pearson Education Canada Inc.
7-19
Location
Transportation Method
Setting up the Initial Tableau
Insert
costs
into
the
shipping
route
option
cells
Add
Create
a column
a row
for
for
plant
each
capacities
plant and
and
a column
a row for
warehouse
each warehouse
demand
Warehouse
Plant
1
Phoenix
Atlanta
Requirements
Figure 7.2
Capacity
3
5.0
6.0
5.4
7.0
4.6
6.6
200
400
300
400
500
900
900
7-20
Location
Transportation Method
Interpreting the Optimal Solution
Figure 7.3
7-21
7-22
Absolute Locations
Frozen
foods
Meats
Dry
groceries
Bread
Vegetables
7-23
Absolute Locations
Frozen
foods
Meats
Dry
groceries
Vegetables
Bread
7-24
Layout Types
Grinding
Grinding
Forging
Forging
Lathes
Lathes
Painting
Painting
Welding
Welding
Drills
Drills
Office
Office
Milling
Milling
machines
machines
Foundry
Foundry
Figure 7.5
7-25
Layout Types
Station 1
Station 2
Station 3
Station 4
Figure 7.5
Foundations of Operations Management, Canadian Edition
Ritzman, Krajewski, Klassen 2004 Pearson Education Canada Inc.
7-26
Pre-Group Technology
Figure 7.6
(continued)
Lathing
Lathing
Lathing
LLL
LL
L
Milling
Milling
Milling
LLL
LL
L
M
M
M
M
M
M
Drilling
Drilling
Drilling
M
M
M
M
M
M
DD
D
DD
D
DD
D
DD
D
Grinding
Grinding
Grinding
LL
L
LL
L
LLL
LLL
Receivingand
and
Receiving
Receiving
and
shipping
shipping
shipping
M
M
M
M
M
M
G
G
G
G
G
G
Assembly
Assembly
Assembly
AA
AA
A
A
G
G
G
G
G
G
A
A
A
G
G
G
G
G
G
A
A
A
7-27
Group Technology
LL
LL
M
M
LL
G
G
G
G
G
G
Cell
Cell 22
Cell
Cell 11
Receiving
Receiving
D
D
M
M
Assembly
Assembly
area
area
A
A
A
A
Cell
Cell 33
LL
M
M
D
D
Shipping
Shipping
Figure 7.6
7-28
7-29
Longhorn Machine
Department
110
105
85
130
90
80
Total
600
2
3
60'
90'
Foundations of Operations Management, Canadian Edition
Ritzman, Krajewski, Klassen 2004 Pearson Education Canada Inc.
7-30
Longhorn Machine
2
60'
90'
Trips between
between Departments
Departments
Trips
Department
Department
1. Burr
Burr and
and grind
grind
1.
NC equipment
equipment
22..NC
3. Shipping
Shipping and
and receiving
receiving
3.
4. Lathes
Lathes and
and drills
drills
4.
5. Tool
Tool crib
crib
5.
11
22
33
20
44
55
20
10
66
80
75
15
90
70
6. Inspection
Inspection
6.
7-31
Longhorn Machine
3
60'
90'
A
Absolutely necessary
E
Especially important
I
Important
6. Inspection
O
Ordinary closeness
U
Unimportant
Foundations ofX
OperationsUndesirable
Management, Canadian Edition
Closeness Rating
Rating
Definition
5. Tool crib
7-32
Longhorn Machine
60'
90'
E
(3,1)
I
(2,1)
A
(1)
O
(1)
E
(1)
I
(6)
O
(1)
A
(1)
Explanation Codes
E
(1)
X
(5)
1
Materials handling
2
Shared personnel
3
Ease of supervision
6. Inspection
4
Space utilization
5
Noise
attitudes
Foundations of6OperationsEmployee
Management, Canadian
Edition
Meaning
5. Tool crib
7-33
Longhorn Machine
60'
90'
3
60'
Figure 7.7
90'
7-34
Longhorn Machine
60'
90'
3
60'
6
Example 7.5
90'
7-35
Longhorn Machine
60'
90'
3
60'
Example 7.5
90'
7-36
Longhorn Machine
60'
90'
3
60'
Example 7.5
90'
Foundations of Operations Management, Canadian Edition
Ritzman, Krajewski, Klassen 2004 Pearson Education Canada Inc.
7-37
Longhorn Machine
60'
90'
1515
11
3,4
15
1
15
3,63,4
90 15
1
15
3,6
9090
33
3,6
270
1
90
4,53,6
70 90
3
270
4,5
7070
11
4,5
70
1
70
4,5
70
1
70
ld =
= 785
785
ld = 400
Example 7.6
ld
Foundations of Operations Management, Canadian Edition
Ritzman, Krajewski, Klassen 2004 Pearson Education Canada Inc.
7-38
Line Balancing
Work
Element
A
B
C
D
E
F
G
H
I
Total
Description
Bolt leg frame to hopper
Insert impeller shaft
Attach axle
Attach agitator
Attach drive wheel
Attach free wheel
Mount lower post
Attach controls
Mount nameplate
Big Broadcaster
Time
(sec)
Immediate
Predecessor(s)
40
30
50
40
6
25
15
20
18
None
A
A
B
B
C
C
D, E
F, G
244
Foundations of Operations Management, Canadian Edition
Ritzman, Krajewski, Klassen 2004 Pearson Education Canada Inc.
7-39
Line Balancing
Big Broadcaster
D
B
40
30
F
25
50
I
G
Figure 7.9
20
6
A
40
18
15
7-40
Line Balancing
Big Broadcaster
D
B
40
30
20
E
6
A
40
C
50
F
25
Desired
Desired
Desiredoutput
output
outputrate
rate
rate===2400/week
2400/week
2400/week
Plant
Plant
Plantoperates
operates
operates40
40
40hours/week
hours/week
hours/week
r = r2400/40
= 60
= 2400/40
=I units/hour
60 units/hour
c = 1/60 = 1 18
minute/unit
Line Balancing
Big Broadcaster
c = 60 seconds/unit
D
B
40
30
20
E
6
A
40
C
50
F
25
Desired
Desired
Desiredoutput
output
outputrate
rate
rate===2400/week
2400/week
2400/week
Plant
Plant
Plantoperates
operates
operates40
40
40hours/week
hours/week
hours/week
TM
TM == 244
244 seconds/60
seconds/60
seconds
seconds
I
== 4.067
4.067 or
or 55 stations
stations
18
Line Balancing
c = 60 seconds/unit
TM = 5 stations
Efficiency = 81.3%
Big Broadcaster
D
B
40
30
20
E
6
A
40
C
50
F
25
18
Line Balancing
= 60 seconds/unit
M = 5 stations
fficiency = 81.3%
Big Broadcaster
D
B
40
30
20
E
6
A
40
F
25
50
I
G
18
Line Balancing
c = 60 seconds/unit
TM = 5 stations
Efficiency = 81.3%
Big Broadcaster
40
20
30
A
40
F
25
Cumm. Idle
Idle
Cumm
Station Candidate
Candidate Choice
Choice Time
Time Time
Time
Station
S1
50
I
G
18
40
20
Line Balancing
c = 60 seconds/unit
TM = 5 stations
Efficiency = 81.3%
40
20
30
S1
E
6
A
40
Big Broadcaster
C
50
F
25
Cumm Idle
Idle
Cumm
Station Candidate
CandidateChoice
Choice Time
Time Time
Time
Station
S1
S1
AA
AA
40
40
20
20
S2
B,C
CI
50
10
18
15
7-46
Line Balancing
c = 60 seconds/unit
TM = 5 stations
Efficiency = 81.3%
Big Broadcaster
D
B
40
20
30
S1
A
S2
40
C
50
E
6
F
25
Cumm Idle
Station Candidate Choice Time Time
S1
40
20
S2
B,C
C
I
50
10
S3
B,F,G
30
30
18
15
7-47
Line Balancing
c = 60 seconds/unit
TM = 5 stations
Efficiency = 81.3%
Big Broadcaster
D
B
40
20
30
S1
A
S2
40
C
50
E
6
F
25
Cumm
Station Candidate Choice Time
Idle
Time
S1
40
20
S2
B,C
C
I
50
10
S3
B,F,G
E,F,G
B
18
F
30
55
30
5
7-48
Line Balancing
c = 60 seconds/unit
TM = 5 stations
Efficiency = 81.3%
Big Broadcaster
D
B
40
20
30
S3
S1
A
S2
40
C
50
F
25
E
6
Cumm
Station Candidate Choice Time
Idle
Time
S1
40
20
S2
B,C
C
I
50
10
S3
B,F,G
E,F,G
B
18
F
30
55
30
5
G
15
7-49
Line Balancing
c = 60 seconds/unit
TM = 5 stations
Efficiency = 81.3%
Big Broadcaster
D
B
40
30
S3
S1
A
S2
40
H
20
E
6
F
25
50
I
G
18
7-50
Line Balancing
c = 60 seconds/unit
TM = 5 stations
Efficiency = 81.3%
D
B
30
S3
S1
A
40
S2
C
Big Broadcaster
40
20
E
S4
F
25
6
S5
50
I
G
Figure 7.10
18
15
7-51
Breakeven
point
Break-even
point
4
2
Farber
Deerfield
Boulder
0
1
2.67
Figure 7.11
7-52
Source
Worchester
Battle Creek
$4.37
Rochester
$4.25
Capacity
Dorchester
$4.89
12,000
12,000
Cherry Creek
$4.00
6,000
Dee Creek
Demand
Figure 7.12
$4.13
6,000
$5.00
$5.27
10,000
4,000
$4.50
$3.75
6,000
12,000
22,000
12,000
18,000
40,000
7-53
Solved Problem 5
E
F
Figure 7.14
D
E
Figure 7.13
Solved Problem 6
D
25
B
80
20
50
40
115
15
120
Figure 7.15
145
130