Food-Processing-Plant-Design-layout

Food Processing Plant Design & layout
The location analyst presents to the management both the cost and the intangible data
results. In such cases, management could take a decision based on a simple composite
measure method illustrated below with the aid of a numerical example.
4.7 Composite measure method and location break-even analysis composite measure
method
The steps of the composite measure method are:
Develop a list of all relevant factors
Assign a scale to each factor and designate some minimum
Weigh the factors relative to each other in light of importance towards achievement
of system goals. .
Score each potential location according to the designated scale and multiply the
scores by the weights.
Total the points each location and either (a) use them in conjunction with a separate
economic analysis, or (b) include an economic factors in the list of factors and choose
the location on the basis of maximum points.
The following illustrates the composite measure method with a numerical example. There
are three potential sites and five relevant factors like transportation costs per week, labour
costs per week, raw material supply, maintenance facilities and community attitude. The
costs are in rupees whereas for the last three factors, points are assigned on 0-100 scale. The
data collected is shown in the following Table.
Table Payoff matrix
Factor
Potential sites
S1 S2 S3
Transportation cost/week Rs
FI
800
640
580
Labour cost/week, Rs.
F2
1180
1020
1160
Raw material supply
F3
30
80
70
Maintenance facilities
F4
60
20
30
Community attitude
F5
50
80
70
The location analyst has pre-established weights for various factors. This includes a
standard of 1.0 for each Rs.10 a week of economic advantage. Other weights applicable are
2.0 on raw material supply, 0.5 on maintenance facilities and 2.5 on community attitudes.
Also the organization prescribes a minimum acceptable score of 30 for maintenance
facilities.
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