MGT2320 - Assignment 3

MGT2320 – Assignment 3
ALGONQUIN COLLEGE
Centre for Continuing & Online Learning
Course Name
Name of Student
Submission Date

Table of Contents
Table of Contents.......................................................................................................................2
1. Case Study – Types of Layout...............................................................................................3
2. Load and Movement Cost......................................................................................................6
2.A The movement cost of the current layout........................................................................6
2.B New layout with lower movement cost...........................................................................6
3 ABC Analysis..........................................................................................................................8
3.A Classification of items by ABC analysis.........................................................................8
3.B Application of ABC analysis...........................................................................................8
4. Cycle Counting.......................................................................................................................9
5. EOQ........................................................................................................................................9
List of Tables
Table 1: New Layout after re-arranging the stations according to the movement.....................7
Table 2: Inventory classification criteria for ABC analysis.......................................................8
Table 3: Cycle counting calculation for per day count..............................................................9
List of Figures
Figure 1: Layout of the new location.........................................................................................3
Figure 2: ABC analysis for classification of items....................................................................8

1. Case Study – Types of Layout
Figure 1: Layout of the new location Source: Heizer & Render (2014)

Rose and Anthony need a new location for their growing business to target the
production of 2000 – 5000 figures per month as the existing setup in the basement can
manufacture and store only 100 figures. The new place should have sufficient space for
supplies storage, manufacturing stations, storage for work-in-progress, as well as a warehouse
for finished products. They will also need a distribution center for sales in US and retail space
for displaying excess inventories for the purpose of sales in Canada. The figure 1 shows the
layout of the new space.
The layout of the new location has been designed while ensuring the requirements. A
combination of product and process layout is suggested as moderate number of figures to be
produced which are identical. It should be noted that a new type of mold is to be constructed
for every new order. However, the remaining process will remain same for all product types.
Therefore, a combination layout will work better as compared to choosing a particular type of
layout design. The process layout will be useful for initial phase of manufacturing where
master and molds are to be constructed.
As these will not be standardized products and will be constructed in low volumes.
However, the product layout should be followed for the remining part of production by
arranging the machines in a particular sequence of operation to produce large quantity if
figures once the mold is constructed. The raw materials should be shipped at one end of the
production line for forward movements throughout various work stations and storage units
and for final shipment of finished goods or to warehouse for storage.
Starting from the bottom left corner of the map shows office space. It has two big
offices, one for Rose and the other one for Anthony. The reception area has been planned in
between the retail space and office area for easy communication. 4 desks have been setup for
administration and finance departments as well as other office workers. A large board table
has been setup in the vacant space to have meetings. A larger space has been reserved for
storage of supplies, molds and figures. the remaining area has been divided for
manufacturing, painting and storage of finished product. The materials movement starts with
the receiving dock where all supplies like chemicals will be collected and stored in the
storage racks. Right after the receiving dock for raw materials, the manufacturing area has
been planned to manufacture molds followed by production of figures, painting and labelling.