Facilities planning

  • Raja G. Kasilingam


Facilities planning addresses two major logistics decisions: facilities location and facilities layout. The first one is concerned with the selection of the best location(s) for establishing facilities based on cost or other criteria. A location may be a country, city or a specific location within a city. Facilities at the macro level may include warehouses, plants, stores, cross-docking facilities, terminals and customer sites. Micro level facilities are smaller components of a larger facility. For example, a factory may consist of a machine shop, paint shop and a welding shop. A machine shop may have milling machines, grinding machines and drilling machines. The second facilities planning decision is concerned with the optimal arrangement and layout of smaller facilities within a major facility in order to minimize material handling and related costs. The layout and location of facilities play a vital role in minimizing the total cost of logistics. The location of facilities has a huge impact on land and construction costs, local taxes and insurance, labor cost and availability and costs of transportation to or from other facilities. The layout of a facility typically has an impact on intrafacility logistics costs such as material handling costs and the cost of material handling equipment.


Transportation Cost Facility Location Material Handling Facility Location Problem Layout Problem 
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Further Reading

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  4. James, R.W. and Alcorn, P.A. (1991) A Guide to Facilities Planning, Prentice-Hall, Englewood Cliffs, NJ.Google Scholar
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Training Aids: Videotapes

  1. Penn State Audio-Visual Services, tel. (800) 826-0312Google Scholar
  2. Business Logistics Management Series: Location AnalysisGoogle Scholar
  3. Business Logistics Management Series: Location Techniques.Google Scholar

Copyright information

© Springer Science+Business Media Dordrecht 1998

Authors and Affiliations

  • Raja G. Kasilingam
    • 1
  1. 1.CSX TransportationJacksonvilleUSA

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