Location Layout

Question 1

List the five supply-side factors (costs) that influence location choosing.

Answer 1

P-Proximity to suppliers (e.g. transportation costs)
L-Land costs (e.g. rent)
L- Labour costs (e.g. designed in England)
C-Community costs (e.g. tax)
E-Energy (e.g. next to a river)

Question 2

What are the four demand-side (customer service) factors that influence choice of location?

Answer 2

L-Labour skills (e.g. location of incubation hubs in universities)
C-Customer proximity (customer convenience)
S-Suitability (e.g. hotel near a beach)
I-Image (e.g. bespoke tailors in London and other fashion houses located there, customers associate an image to a company. Thus companies may share their neighbour’s success for this factor)

Question 3

What are the two location techniques?

Answer 3

1. Weighted score method (Identifying criteria and importance of criteria by assigning weighting scores)
2. Centre-of-gravity method (Minimising transportation costs)

Question 4

Give two examples of Geographical Information Systems.

Answer 4

1. ESRI

2. ArcGIS

Question 5

What are Geographical Information Systems?

Answer 5

These are technological systems used to manipulate, analyse, and present information relevant to a location decision.

Question 6

What is a layout?

Answer 6

It is the physical arrangement of human and/or capital resources.

Question 7

What is the goal of a layout?

Answer 7

To harmonise the process.

Question 8

Factors to consider when designing a layout:

Answer 8

(Picture yourself walking through IKEA)
Length of flow
Respectful staff
Space utilisation
Clarity
Customer service
Flexibility
Accessibility
Safe operations

Question 9

List the four types of layouts.

Answer 9

1. Fixed position layout (Receipient of processing is stationary, resources move as necessary, e.g. open-heart surgery)
2. Functional layout (Similar resources/processes are located together e.g. supermarket frozen goods in freezers)
3. Cell layout (Transformed resources are pre-selected to go to a cell where relevant transforming resources are located, e.g. maternity unit in a hospital)
4. Line layout (Transforming resources are located entirely at the convenience of the transformed resources, e.g. self-service cafeteria : starter, main, drink etc)

Question 10

List one advantage of each layout type.

Answer 10

Fixed position: Customer not disturbed
Functional: Relatively robust in case of disruptions
Cell: Fast throughput
Line: Gives opportunities for specialisation of equiment

Question 11

List one disadvantage of each layout type.

Answer 11

Fixed position: Very high costs
Functional: Can have very high WIP or customer queuing
Cell: Can be costly to change an existing layout
Line: Not very robust if there’s a disruption

Question 12

Describe the steps taken to design a layout.

Answer 12

1. Gather info on space requirements and space available
2. Divide the concerned area into blocks of the total space needed and place the departments (If already placed)
3. Measure the relative importance of each pair of operations being close to each other
4. Gather info and performance criteria based on relative and absolute location of a single department
5. Develop alternative block that best meets performance criteria and area requirements.
6. Define some measure of effectiveness to compare alternative layouts, e.g. weighted score method (e.g. proximity score x distance, the one with the least is the better layout for this example)

Question 13

PS: How many possible ways are there to arrange a layout?

Answer 13

N! (Where N is the number of work centres or departments that need to be ‘laid out’)