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King Fahd University of Petroleum and Minerals

Department of Industrial & Systems Engineering
Term 231 – ISE 422: Facility Layout and Location

TERM PROJECT
Facility Planning for Smart Multi-Door Refrigerators Spare Parts Industry

A refrigerator is a commonly used household appliance, and is one of the most significant appliances
used by a large number of customers. In addition, the refrigeration industry has become an essential
part of life in the 21st century. Correspondingly, the number of refrigerator manufacturing companies
is growing fast, and the latest technologies are being incorporated to improve the thermal
performance, features, and energy demand. Such technologies include automatic defrosting, power
failure warning, water and ice dispenser, adjustable shelves and trays, and so on. Moreover,
connecting refrigerator to the internet (Internet of Things) had been popularized, and became an
essential market need.

Better-Cooler Group company specializes in manufacturing smart multi-door refrigerators, and

offers a range of services in this sector. It produces different smart refrigerators models incorporating
an AI system, and also supplies a variety of companies/retailers with the refrigerators spare parts.
Their team is proud to have developed a reputation for delivering high-quality services and
refrigerators that meet their clients' unique needs. It has recently developed a new plan to enhance its
place in the global market, and decided to open a new manufacturing facility for its refrigerators
spare parts in one of the second countries. Opening a second business location is a big achievement
for Better-Cooler Group, and it includes establishing a set of distribution centers across the country.
The facilities are responsible for the production of different product categories for its domestic market
and for exports.

The company is always seeking out new ways to stay ahead of industry trends and best practices.
Therefore, you as an ISE team have been recruited by Better-Cooler Group to take the lead in this
innovation to achieve the following major tasks:

1. Providing Better-Cooler Group with the best location, in the region, among the
potential locations of the new refrigerators spare parts manufacturing facility.
2. Providing the optimal assignment of departments to floors in a Multiple-Floor
Company Facility.
3. Designing the block layout of the Single-Floor Manufacturing Facility.

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4. Designing the detailed layouts for parking and warehouse.

5. Locating distribution centers across the region and stores to provide the maximum
coverage for customers’ zones.
6. Discussing the impact of the proposed solution on:
a. Environment
b. Economy
c. Societal contexts
d. Global
7. Ethical and professional responsibilities in engineering project.

Relevant data and details are provided in the following pages of the document. Since the company is
unaware of the methodologies that you will be using to design the facilities, you are allowed to make
reasonable assumptions for the missing data. You are expected to use the standards wherever
applicable. Your goal is to provide the company with the best layout and the locations for the
facilities.

I. BETTER-COOLER GROUP'S MANUFACTURING FACILITY LOCATION:

There are seven industrial cities across the nation, and your team should provide the best (optimal)
location for the above facility. The location should be determined taking into consideration the
encompassing facilities and the organization’s distribution centers. Your team should also be able to
estimate the flow for each existing facility. It should be noted that the final manufactured products
can be shipped out the door directly either from the manufacturing facility warehouse to the final
destinations, or to one of the organization’s distributors.

The information of the location of existing facilities/housing zones and the fixed positive distances
is given in the excel worksheet titled Coordinates in [Link] workbook. Note that the
coordinates are labels by their types such as, dealer, workshop, port, industrial complex, malls,
disposal center, governmental facility, university, medical center, park, post office, hyper
supermarket, etc.

The company assigned to your team the facility location determination. Thus, your task is to locate
the best city among the seven industrial cities where Better-Cooler Group's new facility should be
built.

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II. DEPARTMENTS ALLOCATION AND MANUFACTURING FACILITY LAYOUT

The company concerns with determining the position of its departments within a designated section
or the facility while satisfying placement restrictions and optimizing desired objective functions.
Thus, designing a proper facility layout is essential for manufacturing systems. Your team knows that
a good layout in manufacturing systems can lead to improved production line and machine utilization
and can contribute to reducing work-in-process inventory and material handling costs. Moreover, one
of the most crucial issues in designing the manufacturing facility is the human safety considerations.

To reach the above objectives, Better-Cooler Group follows the worldwide standards of organization
and manufacturing facility layout in which the whole facility is divided into two areas as described
in the next two sub-sections.

II.1 Single-Floor Manufacturing Facility Area:

The stages of manufacturing smart multi-door refrigerators spare parts vary and depend on the part
itself. The list of the departments and their areas is provided in Table 1. The process details inside
most of the departments are ignored at this level.

Table 1: Departments Breakdown of the Manufacturing Facility

Dep. # Name Area in 𝑚2 Dep. # Name Area in 𝑚2
1 Exterior Shell 1250 12 Trimming 240
2 Interior Cabin 1178 13 Security 60
3 Cooling Mechanism 2200 15 Restaurant 1110
4 Sheet Cutting 894 16 Lab I 185
5 Sheet Welding 800 17 Lab II 235
6 Coat of Paint 650 18 Quality Control 65
7 Molding and Shaping 1450 18 Warehouse *
8 Back Panel Assembly 1860 19 Maintenance 320
9 Compressor Unit 1300 20 Inspection Area 1220
10 Adding Accessories 514 21 Material Handling 3000
11 Vacuum Forming 460 22 Parking *

As observed from Table 1, areas of the warehouse and parking need to be estimated by your team.
In addition, your team should meet the following constraints proposed by the company:

• The departments of Exterior Shell and Interior Cabin should be adjacent to each other.
• Material Handling department is located near to the center of the manufacturing facility.
• Lab I and Lab II should be in front of each other.
• The restaurant should be easily accessible. Also, security should be at the entrance of the
manufacturing facility.

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The flow between the departments in of the single-floor manufacturing facility is given in the excel
worksheet titled FLOW1 in [Link] workbook.

II.2 Manufacturing Facility Warehouse:

The warehouse consists of two areas: Reserve and Forward areas. The suppliers commitment to ship
the Better-Cooler Group materials on time. Thus, at the beginning of every week, industrial materials
are received at the reserve area’s docking stations. Your team should take the receiving entry/area
into consideration while designing the layout of the manufacturing facility. The reserve area has two
receiving docks, which are used for unloading the incoming shipments. According to the recent
benchmarking, Better-Cooler Group adopted the standard boxes in which incoming shipment
contains products consolidated placed over a pallet (B1210A standard size UK, with height of 2 m).
The total incoming pallets per week is forecasted as 𝑁 (2500,1300) SKUs. Note: 𝑁 (𝜇, 𝜎 2 ) represents
a normal distribution with mean 𝜇 and variance 𝜎 2 . However, due to the high variance, the forecasted
number of pallets may increase or decrease dramatically. Thus, your team may accommodate for this
uncertainty and provide a better estimation. The incoming boxes are stored in the reserve area, where
the storage policy is randomized storage.

At the beginning of every week, items from the reserve area are brought into the forward area based
on the weekly demand. The stored items in the warehouse are classified into 20 product types where
a class-based storage policy is used in the forward area, and it can have up to three delivery stations.
The throughput and space requirements for these items are given in the excel worksheet titled
DEMAND in Data-xx. xlsx workbook.

II.3 Parking:

All the employees working at the facility needs car parking. Management would like to have two
types of parking areas. Parking area-1 will be a 45o inclined parking, which will be used by the
management level. Parking area-2 will be perpendicular parking, which will be used by the other
levels. It is estimated that 30% of the employees will be using bus transportation system provided by
the company and may not be needing the parking. Also, the expected total number of employees in
the two facilities is 1500±95.

Also, the expected daily visit to the whole facility follows a normal distribution with 𝑁 (125,45).
These visits are mainly from other organizations, industries, ministries, companies, community, etc.
Figure1 displays the difference between inclined and perpendicular parking.

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Figure 1: The Difference between Inclined (left) and Perpendicular (right) Parking.

II.4 Multiple-Floor Company Facility Area:

The list of departments to be opened is provided in Table 2. With the help of your team, the company
wants to assign its 40 departments into 8 floors, taking into consideration the following constraints:

• Departments of Dealer Clerk, Spare Parts Agent, and Consumer Affairs should be on the
same floor.
• Management Department should be on floor 8.
• Cafeteria (1), Cafeteria (2), Service room, and Restaurant should be on different floors.
• Meeting Venue and Security should be on floor 1.

The company has a total area of 900 m2 to build the above multiple-floor company facility (excluding
parking area). The elevator's area used in this layout should be determined by your team where the
global standard shall be adopted.

The top view of the available land that will be used to build the manufacturing and multiple-floor
company facilities together is provided in Figure 2. The management would like you to consider the
accessibility to the roads with the building layout: Orange-colored area indicates no access to road,
Gray-colored area indicates access to road, and Red-colored area indicates spaces that cannot be used.

Figure 2: Available Space for the Manufacturing and Company Facilities

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Table 2: The Breakdown of the Multiple-Floor Facility Departments Areas

Dep. # Name Area in 𝑚2 Dep. # Name Area in 𝑚2
1 Security 50 21 Testing and Validation 166
2 Finance & Cost Control 95 22 Restaurant 430
3 Sales and Marketing 285 23 Research and Development 160
4 IT Department 110 24 Cafeteria (2) 55
5 Industrial Relations 170 25 Dealer Clerk 118
6 General Services 80 26 Transportation 72
7 Cafeteria (1) 45 27 Management 363
8 Information Management 65 28 Employees Affairs 208
9 Production/Manufacturing 130 29 Consumer Affairs 227
Quality Assurance and Quality
10 Human Resources 200 30 114
Systems
11 Operations 115 31 Technology 65
12 Meeting Venue 600 32 Health & Safety 160
13 Maintenance and Utilities 90 33 Aftermarket 233
14 Accounting 225 34 Standards 117
15 Inventory Control 105 35 Governmental Relations 145
16 Spare Parts Agent 350 36 Training and Improve 280
17 Service Room 40 37 Distribution 155
Supply Chain and
18 220 38 Phone Central Office 50
Logistics
19 Design 180 39 Scheduling 77
20 Elevator * 40 Parking *

II.5 The Block Layout Problem:

Your team is provided with following information regarding to the layout and the land where the
new facility will be built on:

• The manufacturing facility should be built over an area of 22,000 𝑚2 .

• The multiple-floor facility area should be built over an area of 900 𝑚2 .
• The above two areas do not include the parking. The building shape should be rectangular
or square.
• The management would like your team to consider three gates. One gate for each area, and
one gate separates the two areas.
• You are allowed to make reasonable assumptions for the missing data.

The flow between the departments of multiple-floor organization facility is given in the excel
worksheet titled FLOW2 in [Link] workbook. Your team is assigned to implement the
following tasks:

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1. Designing the block layout of the single-floor manufacturing facility.

2. Providing the optimal assignment of the multiple-floor organization facility departments
into its floors
3. Designing the detailed layouts for parking and warehouse.

III. DISTRIBUTION CENTERS AND STORES UNITS:

III.1 Distribution Centers:

In the logistics network, distribution centers are significant nodes that connect all logistics activities.
Thus, to manage the logistics operations as well as construct the logistics network, it is of extreme
significance to address the logistics distribution center. The decision is to build four distribution
centers across the nation where the aim is to locate these centers according to different approaches.
The location decision should also take into consideration the location of the headquarter facility.

In this regard your team are required to do the following tasks:

1. Proposing three possible locations for these four centers. The three locations can be obtained
using different approaches, models, assumptions, or criteria. Your team needs to provide a full
justification for the proposed locations. These locations should be depicted on the map.

2. Selecting the best locations out of the proposed ones. Your team also needs to provide the
reasoning for this selection.

The information on the location of existing facilities zones and the fixed positive distances is
given in the excel worksheet titled Coordinates in [Link] workbook.

III.2 Stores:

A reasonable location of stores can directly improve efficiency, save logistics costs, and enhance
customer satisfaction within the whole logistics system. Therefore, Better-Cooler Group is
seeking the help of your team to locate and build several stores units across the region. On the
behalf of the company, your team made a study looking for some important inputs regarding
region zones, the expected demand at each zone, the distance between each pair of zones, travel
cost per case per unit distance, the cost of stationing a collection unit at a zone, and the capacity
of the store. The information is given in the excel worksheet titled Stores Units in Data-xx. xlsx
workbook. Your team mission is to locate the optimal number of stores units serving maximum
number of region zones.

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IV. DELIVERABLES:

1) Identify the location of the Better-Cooler Group manufacturing facility plant

a) Clearly mention your assumptions.
b) Provide the company with the best location.
c) Provide a full justification for such decision.
d) Depict the best location on the network.
2) Design the block layout of the manufacturing facility area, and assign the departments
into the floors in multiple floor facility area:
a) Clearly mention your assumptions
b) Build the mathematical model
c) Depict the layout on the available area
d) Depict the aisles and paths
3) Design the layout of the warehouse and parking area:
a) Clearly mention your assumptions
b) Build the reserve layout
c) Build the forward layout
d) Draw/depict the top view of the warehouse’s layout
4) Identify the number and locations of distribution centers and stores units:
a) Clearly mention your assumptions.
b) Build the mathematical model
c) Depict your solutions on the map network for the distribution centers.
5) From 1 to 4, discuss the impact of the proposed solutions on:
a) Environment
b) Economy
c) Societal contexts
d) Global
6) Ethical and professional responsibilities in engineering project.

You are free to make assumptions. However, the assumptions should be reasonable. You should
provide reasoning/arguments to support your assumptions. You are free to use any internationally
recognized software/solver in order to obtain the solution of any mathematical model. For example,
you can use modeling software like LINGO, AMPL, GAMS, Python, etc. Also, you can use solvers
like Lingo, Gurobi, or Cplex. You need to clearly mention the quality of the solution (optimal
solution, or how close to optimal using relative percentage). You should submit the code of your
mathematical models ( .lg4 file for LINGO users, .gms file for GAMS users, .mod & .dat files for
AMPL), and the result files from the software (users, .lgr for LINGO users, .lst file for GAMS,
and .txt for AMPL users).
ISE 422 – Term Project Term 231 Almaraj & Almoghathawi