MBA 2nd Sem Lacture Note - 01

National Institute of Technology Agartala
Department of Mathematics
Lecture Note number 01

On
Operations Research for MBA 2nd Semester
The following topics I will teach you and rest of the syllabus will be covered by Dr. Abhijit Baidya Sir.
1. Layout designing, product, process & cellular layout, assembly line balancing, service layouts.
2. Aggregate plans and master production schedules, MRP, MRP II, lot-sizing, MPS, operations scheduling,
priority rules & techniques, work centre & personnel scheduling.
3. Inventory management, types, models, systems, inventory control.
4. Fundamentals of quality management, TQM philosophy, introduction to six-sigma
5. Design and use SQC charts [process capability, x-bar, R, p and c-charts, acceptance sampling.
6. Facets of world class manufacturing, lean manufacturing aspects
1. How will you classify Layout design?

Layouts can be classified into the following five categories:
 Process layout.
 Product layout
 Combination layout
 Fixed position layout
 Group layout
2. What are the advantages and limitations of Process layout?
Process layout is recommended for batch production. All machines performing similar type of operations are
grouped at one location in the process layout e.g., all lathes, milling machines, etc. are grouped in the shop will be
clustered in like groups.
Thus, in process layout the arrangement of facilities are grouped together according to their functions. The
flow paths of material through the facilities from one functional area to another vary from product to product. Usually
the paths are long and there will be possibility of backtracking.
Process layout is normally used when the production volume is not sufficient to justify a product layout.
Typically, job shops employ process layouts due to the variety of products manufactured and their low production
volumes.
Diagram for Process layout
Advantages of Process Layout:

 In process layout machines are better utilized and fewer machines are required.
 Flexibility of equipment and personnel is possible in process layout.
 Lower investment on account of comparatively less number of machines and lower cost of general purpose
machines.
 Higher utilization of production facilities.
 A high degree of flexibility with regards to work distribution to machineries and workers.
 The diversity of tasks and variety of job makes the job challenging and interesting.
 Supervisors will become highly knowledgeable about the functions under their department.
Limitations of Process layout:
 Backtracking and long movements may occur in the handling of materials thus, reducing material handling
efficiency.
 Material handling cannot be mechanized which adds to cost.
 Process time is prolonged which reduce the inventory turnover and increases the in- process inventory.
 Lowered productivity due to number of set-ups.
 Throughput (time gap between in and out in the process) time is longer.
 Space and capital are tied up by work-in-process.
3. What are the advantages and limitations of Product layout?
In this type of layout, machines and auxiliary services are located according to the processing sequence of the
product. If the volume of production of one or more products is large, the facilities can be arranged to achieve efficient
flow of materials and lower cost per unit. Special purpose machines are used which perform the required function
quickly and reliably.
The product layout is selected when the volume of production of a product is high such that a separate
production line to manufacture it can be justified. In a strict product layout, machines are not shared by different
products. Therefore, the production volume must be sufficient to achieve satisfactory utilization of the equipment. A
typical product layout is shown in the following figure.
Diagram for Product layout
Advantages of Product Layout: (any five)

 The flow of product will be smooth and logical in flow lines.
 In-process inventory is less.
 Throughput time is less.
 Minimum material handling cost.
 Simplified production, planning and control systems are possible.
 Less space is occupied by work transit and for temporary storage.
 Reduced material handling cost due to mechanized handling systems and straight flow.
 Perfect line balancing which eliminates bottlenecks and idle capacity.
 Manufacturing cycle is short due to uninterrupted flow of materials.
 Small amount of work-in-process inventory.
 Unskilled workers can learn and manage the production.
Limitations of Product Layout:

 A breakdown of one machine in a product line may cause stoppages of machines in the downstream of the
line.
 A change in product design may require major alterations in the layout.
 The line output is decided by the bottleneck machine.
 Comparatively high investment in equipments is required.
 Lack of flexibility. A change in product may require the facility modification.
4. What do you mean by Combination Layout?

A combination of process and product layouts combines the advantages of both types of layouts. A
combination layout is possible where an item is being made in different types and sizes. Here machinery is arranged in
a process layout but the process grouping is then arranged in a sequence to manufacture various types and sizes of
products. It is to be noted that the sequence of operations remains same with the variety of products and sizes. The
following figure shows a combination type of layout for manufacturing different sized gears.
Diagram for Product layout
5. What do you mean by Fixed Position Layout?

This is also called the project type of layout. In this type of layout, the material, or major components remain
in a fixed location and tools, machinery, men and other materials are brought to this location. This type of layout is
suitable when one or a few pieces of identical heavy products are to be manufactured and when the assembly consists
of large number of heavy parts, the cost of transportation of these parts is very high.
Diagram for Fixed position layout
Advantages of Fixed position layout:

 Helps in job enlargement and upgrades the skills of the operators.
 The workers identify themselves with a product in which they take interest and pride in doing the job.
 Greater flexibility with this type of layout.
 Layout capital investment is lower.
6. What are the advantages and limitations of Group Layout?

This is also called Cellular Layout. There is a trend now to bring an element of flexibility into manufacturing
system as regards to variation in batch sizes and sequence of operations. A grouping of equipment for performing a
sequence of operations on family of similar components or products has become all the important.
Diagram for Group layout

Advantages of Group Technology Layout
 Group Technology layout can increase
 Component standardization and rationalization.
 Reliability of estimates.
 Effective machine operation and productivity.
 Customer service.
 It can decrease the Paper work and overall production time.
 Work-in-progress and work movement.
 Overall cost.
Limitations of Group Technology Layout
 This type of layout may not be feasible for all situations. If the product mix is completely dissimilar, then
group technology may not have meaningful cell formation.
7. What are the applications of Group technology layout in Operation Management?

Group technology (GT) is the analysis and comparisons of items to group them into families with similar
characteristics. GT can be used to develop a hybrid between pure process layout and pure flow line (product) layout.
This technique is very useful for companies that produce variety of parts in small batches to enable them to take
advantage and economics of flow line layout.
The application of group technology involves two basic following steps:

 First step is to determine component families or groups.
 The second step in applying group technology is to arrange the plants equipment used to process a
particular family of components. This represents small plants within the plants.
The group technology reduces production planning time for jobs. It reduces the set-up time.
Thus group layout is a combination of the product layout and process layout. It combines the advantages of
both layout systems. If there are m-machines and n-components, in a group layout (Group-Technology Layout),
the m-machines and n-components will be divided into number of machine-component cells (group) such that all the
components assigned to a cell are almost processed within that cell itself. Here, the objective is to minimize the
intercellular movements.
The basic aim of a group technology layout is to identify families of components that require similar of
satisfying all the requirements of the machines are grouped into cells. Each cell is capable of satisfying all the
requirements of the component family assigned to it.
The layout design process considers mostly a single objective while designing layouts. In process layout, the
objective is to minimize the total cost of materials handling. Because of the nature of the layout, the cost of
equipments will be the minimum in this type of layout. In product layout, the cost of materials handling will be at the
absolute minimum. But the cost of equipments would not be at the minimum if the equipments are not fully utilized.
In-group technology layout, the objective is to minimize the sum of the cost of transportation and the cost of
equipments. So, this is called as multi-objective layout.
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National Institute of Technology Agartala

Lecture Note number 01

1. How will you classify Layout design?

2. What are the advantages and limitations of Process layout?

Diagram for Process layout

Advantages of Process Layout:

3. What are the advantages and limitations of Product layout?

Diagram for Product layout

Advantages of Product Layout: (any five)

Limitations of Product Layout:

4. What do you mean by Combination Layout?

5. What do you mean by Fixed Position Layout?

Advantages of Fixed position layout:

6. What are the advantages and limitations of Group Layout?

Diagram for Group layout

Limitations of Group Technology Layout

7. What are the applications of Group technology layout in Operation Management?

The application of group technology involves two basic following steps:

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