Plant layout deals with selection of the most effective arrangement of facilities or departments to achieve the best utilization of the available resources to produce a product. The plant layout problem is of great interest to both scholars and practitioners. Historically, two basic criteria have been most commonly used to generate an optimum layout. These two criterions are quantitative and qualitative.

In this study an approach is introduced as a heuristic technique for combining the quantitative and qualitative aspects of the facility layout. The two objectives which may be contradicting, are minimizing material handling costs and maximizing a closeness rating measure. Assuming that the decision-maker is capable of responding to a paired comparison of alternatives, this algorithm is developed to, iteratively, reduce the feasible space of the weighting factor, which combines the two objectives. The algorithm terminates when the predetermined bounds on the weighing factor are reached. A graphical method is presented to help analyze the sensitivity of the optimum layout into small variations in the estimated value of the decision-maker’s preferred weight.

The proposed approach has been applied in a case study, which is an exhaust system factory (Engineering Company for Manufacturing Exhaust Systems) located in the 6th. October City. This factory was founded as a small workshop for producing hand-made mufflers to meet the needs of the local automotive repair shops. In order to satisfy the needs of assembly plants of exhaust systems, a new location in the 6th. October City has been chosen, modern machinery supplied and scientific techniques followed to accomplish optimum layout. By applying this approach the best layout can be generated. In this layout warehouses were rearranged and a reduction the total material handling costs of 32% has been achieved.

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