an existing warehouse, the baggage department in an airport, department building of IE in EMU, . a production plant, a retail store, a dormitory, . a bank, an office, . a cinema, . a parking lot, or any portion of these activities etc. x16 4.4 Factors affecting Facility Layout Facility layout designing and implementation is influenced by various factors. These factors va from industry to industry but influence facility layout. These factors are as follows: The design of the facility layout should consider overall objectives set by the organization Optimum space needs to be allocated for process and technology. A proper safety measure as to avoid mishaps. Overall management policies and future direction of the organization. 4.5.1 Break-Even Analysis The objective is to maximize profit. On economic basis only revenues and cost need to be considered for comparing various locations. The steps for locational break-even analysis are: Determine all relevant costs for each location. Classify the location for each location in to annual fixed cost and variable cost per unit. Plot the total costs associated with each location on a single chart of annual cost versus annual volume. Selwct the location with the lowest total annual cost(TC) at the expected production volume. Question: Potential locations A,B and C have the cost structures shown below for manufacturing a product expected to sell for Rs 2700 per unit. Find the most economical location for an expected volume of 2000 units per year. Site A B Fixed Cost/year 6,000,000 7,000,000 5,000,000 Variable Cost/Unit 1500 500 4000