Abhi rana)factor rating method of plant location

factor rating method of plant location

1. J.N. Govt. Engg. College SUNDERNAGAR Presentation Mill Management and Maintenance TE-704 ABHISHEK RANA 10BTD5090001 Textile Engineering Factor Rating Method

2. Factor rating method Most widely used method? Useful for service or industrial facilities: can include intangible, qualitative factors. List relevant factors, assign a weight Develop a scale for each factor Score each factor using the scale Multiply scores by weights, add up Choose location with highest total score Kind of like “Miss America” Lots of work for each location, consider small list of candidates Use centroid to find an area, factor rating for town

3. Factor rating example We need to decide where to build new coffee roasting plant. There are two possible locations. Dallas and Denver. We consider the following factors: Transportation Annual trucking costs in $K Lease Annual cost in $K Labour Availability Scale 1 – 10, unemployment, related industries Quality of Life 1 – 10 outdoor activities, cultural, sports and education

4. Factor rating example Using a scoring system we have w e following: Factor Weight TX CO Transportation 0.4 900 1023 Plant lease cost 0.3 45 39 Labor availability 0.2 10 8 Quality of life 0.1 7 9.5

5. Normalizing scores All factors must be scored on the same scale like 1-10 or 0-1.0 etc. Costs need to be re-scaled Lowest cost site gets a 10 More expensive site gets Plant lease: × 10 = 8.7 Transportation: × 10 = 8.8 Multiply these raw scores b weights for weighted scores.  

6. Factor rating example TX CO Factor Weight Raw Wtd Raw Wtd Transportation 0.4 10 4.00 8.80 3.52 Plant 0.3 8.7 2.61 10 3.00 Labor 0.2 10 2.00 8 1.60 Quality Life 0.1 7 0.70 9.5 0.95 TOTAL 9.31 9.07 TX is best, but not by a huge amount.

7. summary Factor Rating Method Can include non-quantitative considerations. A weight for each category must assigned. System for awarding points to each candidate has to be worked out. Sum the weighted scores in each category. Coming up with weights and scoring system can be political.

8. Any question ?

9. Thank you