MB0028 – PRODUCTION & OPERATIONS MANAGEMENT

Name:
Subject:
Natasha Menezes
Production & operations management

Roll Number: Assignment Number:

540910066 MB0028 Set 1 & 2

Study Center: Centre Code:

Kuwait Educational Centre 2527

Set – I

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1. Explain the various automated systems for transfer of materials in the production
plant? Illustrate your answer by considering an example of an automobile showroom

Answer:

Basically, automation system comes to reduce labor power and time in the production. Here we can
see the evolution systems with some examples. The goods requited by society were produces in
small quantities by craftsman who would know the need of the community and produced them by
their own hands with simple tools. The apprentices orby another craftsman, who would make them
to meet the requests made. The parts and components used to make these machines had to be
replaced when they wore making parts so that interchange ability was achieved made setting up
standards and specifications important for meeting.

The craftsmen gave way to engineers, workers, superiors and inspectors. Division of labor became
necessary to achieve efficiencies and the jabs that became specialized. Competition has
necessitated improved quality, reduced sates and better services to the customer.

Automation systems cost huge sums of money and therefore a deep analysis of the various factors
has to be done. For services, automation usually means labor saving devices in education, long
distance learning technology helps in supplementing class room instruction. The facilitating goods
that are used are web site and videos.

Automation in the banking sector has resulted in ATMs which same the banks a huge amount
customer satisfaction. Automation is ideas when the service provided or the product manufactured
is highly standardized.

Some extent of automation can be designed even with customization i.e. product or service a meant
to produce or deliver low volume specific to a requirement. The advantages of automation are it has
low variability and will be more consistent on a repetitive basis.

The machines have sensing and control devices that enable them to operate automobile. The
simplest of them called machine attachments replace human effort. They guide, locate, move and
achieve revise position by means of came, optical sensing. Load sensing mechanisms and activate
the controls to remove human intention.

Robots are higher in the order of automation as they perform a variety of tasks. They are designed
to move movements according to programmers written into the computer that inside them.

With the help of automation, inspection of component can be done 100%ensures highest quality
identification and movement of materials are helped by bar codes which are read and fed into the
system far monitoring quantity, location, movement etc. They help the automated systems to start
information and provide information for effecting any changes necessary. To make effective use of
automated machines, we need to have the movement of materials from and to different time as
stores, automated, Automated storage and Retrieval systems- ASRS-receive orders for materials
from anywhere in the production area, collect materials in the works times. Computers and

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information systems are used for placing orders for matters, give commands adjust inventory
records which show the location and quantity of materials needed.

Automated guided vehicle systems- AGVS – are pallet trucks and unit load carriers follow
embedded guide wires or paint strips to destinations as programmed.

In an automobile showroom we can see all the work automatically with latest machine.

2. State the important considerations for locating an automobile plant? Collect

information on layout planning of an automobile plant from various sources and furnish
the same.

Answer:

To locate an automobile company or plant many thing should be consider. For an automobile plant
automated flaw lines, automated assembly lines, flexible manufacturing systems, global transition
rapid prototyping. Building manufacturing flexibility things are necessity.

About the automated flow lines we can say it is a machine which is linked by a transfer system
which moves the parts by using handling machines which are also automated, we have an
automated flow line.

Human intervention ma is needed to verify that the operations are taking place according to
standards. When these can be achieved with the help of automation and the processes are
conducted with self regulation, we will have automated flow lines established.

In fixed automation or hard automation, where one component is manufactured using services
operations and machines it is possible to achieve this condition. We assume that product life cycles
are sufficiently stable to interest heavily on the automate flow lines to achieve reduces cast per unit.

Product layouts ate designed so that the assembly tasks are performed in the sequence they are
designed at each station continuously. The finished item came out at the end of the line.

In automated assembly lines the moving pallets move the materials from station to station and
moving arms pick up parts, place them at specified place and system them by perusing, riveting, &
crewing or even welding. Sensors will keep track of their activities and move the assembles to the
next stage.

The machines are arranged in a sequence to perform operations according to the technical
requirements.

The tools are loaded, movements are effected, speeds controlled automatically without the need for
worker’s involvement.

The flexibility leads to better utilization of the equipments. It reduces the numbers of systems and
rids in reduction of investment as well as a space needed to install them. One of the major cancers

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of modern manufacturing systems is to be able to respond to market demands which have

uncertainties.

Prototyping is a process by which a new product is developed in small number so as to determine

the suitability of the materials, study the various methods of manufactured, type of machinery
required and develop techniques to overcome problems that may be encountered when full scale
manufacture is undertaken.

Prototypes do meet the specification of the component that enters a product and performance can
be measured on these.

It helps in con be reforming the design and any shortcomings can be rectified at low cost.

Flexibility has three dimensions in the manufacturing field. They are variety, volume and time.
Their demands will have to be satisfied. In that sense they become constraints which restrict the
maximization of productivity. Every business will have to meet the market demands of its various
products in variety volumes of different time.

Flexibility is also needed to be able to develop new products or make improvements in the products
fast enough to cater to shifting marker needs.

Manufacturing systems have flexibility built into them to enable organization meet global demand.
You have understood how the latest trends in manufacturing when implemented help firms to stay a
head in business.

3. Who are the players in a project management? What are the various roles and
responsibilities of the players in a project management?

Answer:

At first we will discuss about project management then we will discuss about players in project
management. Project management is the practice of controlling the use of resources, such as cost,
time manpower, hardware and software involved in a project. That starts with a problem statement
and end with delivery of a complete product.

Here we will see the participants of project management:

In the project management players individual and organizations both are involved-

That is actively involved in the project whose interests may be affected by the outcome of the
project.

Exert influence over the project and its results players or also called “stake holders’’ of the project.

Project manager – the individual responsible for managing the project.

Customer – the individual or organization that will use the product the end result of the project.

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Performing organization – the enterprise whose employees are mast directly involved in doing
the work of the project.

Sponsors – the individual or group within or external to the performing organization that funds the
project.

Now, we will define the role and responsibilities of project management. Here are some roles and
responsibilities:

There are number of projects which an organization works on. It is not possible for one individual
to manage all the projects.

There is a team of managers who manage the projects.

There may be different teams working on different projects.

An experienced project manager and this team may manage more than one project at a time.

The project team is responsible for ensuring that the project upon completion shall deliver the gain
in the business for which it is intended for:

 The project team has to properly co-ordinate with each other working on different
aspects of the project.
 The team members are responsible for the completion of the project as per the plans
of the project

Characteristics of project mindset: - some of the characteristics of project mindset are the
following –

Time – it is possible to improve the pace of the project by reducing the time frame of the process.
The mindset is normally to work in a comfort made by stretching the time limits.

Responsiveness – it refers to quickness of response of an individual. The vibrancy and livens of an

individual or an organization are proportional to its capability of evolving process and structure for
superior responsiveness time constant.

Information sharing – information is owner information is the matter key to today’s business.
Information sharing is the characteristic of the project mindset today.
Process – project mindset lays emphasis on flexible process. The major difference in a process and
a system is in its capabilities of providing flexibility to different situational encounters. Flexible
process possesses greater capabilities of adaptability.

Structured planning – structure planning based a project management life cycle enables one to
easily and conveniently work according to the plan.

4. What are the various steps in project monitoring and controlling a project?

Answer:

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Any project aimed at delivering a product or service has to go through phases in a planned manner
in order to meet the requirements. It’s only by careful monitoring of the project progress. It
required establishing control factors to keep the project on the track of progress. The results of any
stage in a project, depends on the inputs to that stage. It is therefore necessary to control all the
inputs and the corresponding outputs from a stage. A project management may use certain standard
trolls to keep the project on track.

The project manager and the team members should be fully aware of the techniques and methods to
rectify the factors influencing delay of the project and its product. The methodology of PERT
(programmer Evolution Review Technique) and CPM (critical path method) may be used to
analyze the project. In the PERT method one car find out the variance and use the variance to
analyze the various probabilistic estimates pertaining to the project. Using the CPM one can
estimate the start time and the finish time for every event of the project in its WBS (work
Breakdown Structure).

The analysis charts can be used to monitor, control, track and execute a project. The various steps
involved in monitoring and controlling a project from start to end are as follows:

a) Preliminary work- the team members understand the project plans, project stage
schedule, progress controls, tracking the schedules. Summary of the members have to
understand the tolerances in any change and maintain a change control log. They must
realize the need and importance of quality for which they have to follow strictly quality
agendas. They must understand the stage status reposes, stage and reports, stage end
approval reports.
b) Project progress- The members must keep a track of the project progress and
communication the same to other related members of the project. They must monitor and
control project progress, through the use of regular check points, quality charts. Statistical
tables, control the quality factors which are likely to deviate from expected values as any
deviation may result in change to the stage schedule.
c) Stage control- The manager must establish a project check paint cycle. For this suitable
stage version control procedure may be followed.
d) Resources- Plan the resources required for various stage of the project. Brief both the
project team and the key resources about the objectives of every stage, planned activities,
products, organization. Metrics and project controls.
e) Quality control- This is very important in any project: Quality control is possible if the
project member’s follow- Schedule quality review, Agenda for quality review, conduct
quality review and follow up.
f) Progress control- It is the main part at assessment- Progress control assesses- monitor
performance, update schedule, update casts, Re-plan stage schedule, conduct team status
review etc. Along with we create status report, create flash reports, project status reports
etc.
g) Approvals – lastly, project sage reviews and the decisions taken and actions planned
need to be approved by the top management. The goals of such review are to improve
quality by finding defects and to improve productivity by finding defects in a cost
effective manner. The group review progress includes several stage like planning,
preparation and overview, a group review meeting and rework recommendation and
follow-up.

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5. Explain the necessity and objectives of SCM?

Answer:

SCM is the abbreviation of supply chain Management. It is considered by many express worldwide
as the ultimate solution towards efficient enterprise management.

The necessity and objectives of SCM

SCM is required by and enterprise as a tow to enhance management effectiveness with a following
organizational objective:

 Reduction of inventory
 Enactment in functional effectiveness of existing systems like ERP, Accounting. Software
and Documentation like financial reports statements ISO 9000 Documents etc.
 Enhancement of participation level and empowerment level
 Effective integration of multiple systems like ERP, communication systems, documentation
system and secure, Design R&D systems etc.
 Better utilization of resources- men, material, equipment and money.
 Optimization of money flow cycle within the organization as well as to and from external
agencies.
 Enhancement of value of products, operations and services and consequently, enhancements
of profitability.
 Enhancement of satisfaction level of customer and clients, supporting institutions, statutory
control agencies, supporting institutions, statutory control agencies, suppliers and vendors,
employees and executives.
 Enhancement of flexibility in the organization to help in easy implementation of schemes
involving modernization, expansion and divestment, mergers and acquisitions.
 Enhancement of coverage and accuracy of management information systems.

With the objectives of SCM, its implementation is required. Implementation is in the form of
various functional blocks of an organization interpenetrated through which a smooth flow of the

product development is possible.

A relatively new SCM option involves web based software with a browser interface. Several
electronic markets place for buying and selling goods and materials.

6. What are the steps involved in SCM implementation?

Answer:
There are many steps which involved in SCM implementation are-
Business Process, sales and marketing. Logistics, costing, demand planning, trade- off analysis,
environmental requirement, process stability, integrated supply, supplier management, product
design, suppliers, customers, material specifications, etc.

Some important aspect of SCM:

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 The level of competition existing in the market and the impact of competitive forces on the
product development.
 Designing and working on a strategic logic for better growth through value invention.
 Working out new value curve in the product development along with necessary break point.
 Using it to analyses markets and the economies in product design.Tine, customer, quality of
product and the concept of survival of fittest.

Steps of SCM implementation:

Group customer by need:

Effective SCM groups, customer by distinct service needs those particular segments.

Customize the logistics networks:

In designing their logistics network, companies need to focus on the service requirement and profit
potential of the customer segments identified.

Listen to signals of market demand and plan accordingly

Sales and operations planners must monitor the entire supply chain to detect early warning signals
of changing customer demand and needs.

Differentiate the product closer to the customer

Companies today no longer can afford to stock pile inventory to compensate for possible
forecasting errors; instead, they need to postpone product differentiation in the manufacturing.
Processes closer to actual customer demand.

Strategically manage the source of supply

By working closely with their key suppliers to reduce the overall casts of owning materials and
services; SCM maximizes profit margins both for themselves, and their supplies.

Develop a supply chain wide technology strategy

As one of the cornerstones of successful SCM information technology must be able to support
multiple levels of decision making.

Adopt channel spanning performance measures

Excellent supply performance measurement systems do more than just monitor internal functions.
They apply performance criteria that embrace both service and financial metrics, including each
account’s true profitability.

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Set - 2

1. Explain how material flow information helps in work centre decision. Consider the
example of a shopping center to illustrate your answer?

Answer:

The decision which involves during uses of material flow information is mentioned below by
considering the example of a shopping centre:

A work center (E.g. Shopping Center) is a production facility comprising of one or more machines
and one or more workmen considered as a single unit for purposes of estimation of capacity. This
shopping center may have a single operation/ process or a number of them conducted on the input
items. In the pipeline of receiving the material to supplying to customers, each work center’s
contribution is vital as materials are scheduled, routed and loads to be sent to it.

They are even considered as cash centers. Location trust means relative position of different centers
so as to minimize the movement of materials, meet technological sequences, to reduce congestion,
maximize throughput, improve part tracking ability and avoid repetitive movements. In addition
another consideration is to provide for expansion of production.

Each work center receives information along with material that enters it in a shopping center; the
material also leaves the shopping center with information. The route sheet contains information
about the material, process, quantities, and inspection procedures. Etc. the drawings or instructions
tell the condition of the material of entry and the required condition at exit.

In this sense every operation consists of material transformation occurring on the basis of
information. Activities conducted are on the basis of information that flows with material. Different
locations have to accommodate the constraints of the basis of darning maximums benefit of the
information that is available. Basically, each location is determined on the basis of from and to:
where does it receive material goes. Some centers have to close as a matter of necessity, some need
not to be and some need to be as far away as possible.
This aspect has been given a rating scale in terms of alphabets as under:

Absolutely necessary to be close

Essential to be close
Important that they are close
Ordinary closeness
Unimportant that they are close or not
Not desirable that the centers are close

It can be seen that this is only a guide for Indian location as the work centers as there will many
competing factors that have to be accommodated.

2. What are the reasons for failure of a project? Give suitable examples.

Answer:

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Before knowing the reasons of failure we have to know about project. Project is a set of activities
which are networked in order and aimed towards achieving goal of a project.

The reasons for project failure:

A. General:
 Incidence of Project failure
 Higher cost of capital
 Projects being initiated of random at all levels
 Project objective not in line with business objective
 Project management not observed
 Project manager with no prior experience in the related project
 Non- dedicated team
 Lack of complete support from clients
 Misuse of financial resources
 Business strategy superseded
 Overspends in excess of agreed budgets

B. Management Reasons
 Ability to adapt to new resource combinations
 Differences between management and client
 Insufficient risk management
 Insufficient end-user management
 Insufficient training of users
 Inappropriate procedures and routines
 Lack of management judgement
 Lack of software development metrics
 Loss of key personnel
 Poor vendor management
 Poor communication between stakeholders
 Poor contract management
 Poor financial management
 Project management capability
 Poor delegation and decision making
 Unfilled promises to users and other stakeholders

C. Technical reasons
 Inappropriate architecture
 Insufficient reuse of existing technical objects
 Inappropriate testing tools
 Inappropriate coding language
 Inappropriate technical methodologies
 Lack of formal technical standards
 Lack of technical innovation (obsolescence)
 Misstatement of technical risk
 Obsolescence of technology
 Poor interface specifications
 Poor quality code

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 Poor systems testing

 Poor data migration
 Poor systems integration
 Poor configuration management
 Poor change management procedures
 Poor technical judgement

D. Factors contributing to project success not emphasized:

 Project objective in alignment with business objective
 Working within the framework of project management methodology
 Effective scoping planning, estimation, execution, controls and reviews, project
bottlenecks
 Communication and managing expectations effectively with clients, team merits and
stake holders
 Prior expectance of PM in a similar project

E. Overview of information and communication Technologies (ICT) project:

 Involve information and communication technologies such as the world wide web, e-
mail, fibre-optics satellites
 Enable societies to produce, access, adapt and apply information in greater amount,
more rapidly and at reduce costs
 Offer enormous opportunities for enhancing business and economic viability
 Common problems encountered during projects
 No prioritization of project activity from an organizational position
 One or more of the stages in the project mishandled
 Less qualified non-dedicated manpower
 Absence of smooth flow of communication between the involved parties

These basic reasons lead a project to failures. In the project failures business management and
project management is directly involved. From the management point of view it is basic things to
care above topics to success of a project. Project is the core business of a company.

3. Explain the various phases in project management life cycle?

Answer:

This is the initial phase of any project. In this phase information is collected from the customer
pertaining to the project and the requirements are analyzed. The entire project has to be planned
and it should be done in a strategic manner. The project manager conducts the analysis of the
problem and submits a detailed report to the top project justification, details on what the problem is
a method of solving the problem, list of the objectives to be achieved, project budget and the
success rate of completing the project. The report must also contain information and the project
feasibility, and the risks involved in the project.

Project management life cycle is the integrated part of management. It is attach with project
responsibility or failure of a project

The important tasks of this phase are as follows:

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 Specification Requirements Analysis (SRA): It has to be conducted to determine the essential

requirements of a project in order to achieve the target.
 Feasibility study: To analyze whether the project is technically, economically and practically
feasible to be undertaken.
 Trade off analysis: To understand and examine the various alternatives which could be
considered.
 Estimation: To estimate the project cost, effort requires for the project and functionality of
various process in the project.
 System design: Choose a general design that can fusil the requirements.
 Project evolution: Evaluate the project in terms of expected profit, cost and risks involved
marketing phase.

Phases in Project Management Life Cycle:

Marketing Phase:
A project proposal is prepared by a group of people including the project manager. This proposal
has to contain the strategies adopted to market the product to the customers.

Design Phase:
– This phase involves the study of inputs and outputs of the various project stages.
– Inputs received, consist of project feasibility study, preliminary project evaluation details,
project proposal and customer interviews.
– Outputs produced, consist of system design specifications, functional specifications of the
project, design specifications of the project and the project plan.

Execution Phase:
In this phase the project manager and the team members work on the project objectives as per the
plan. At every stage during the execution reports are prepared.

 Control, Inspection, Testing & Delivery Phase:

During this phase, the project team works under the guidance of the project manager. The project
manager has to ensure that the team working under his, implements the project designs accurately.
The project has to be monitored or tracked through its cost, manpower and schedule. The project
manager has to ensure ways of managing the customer, perform quality control work.

 Closure and post completion analysis Phase:

Upon satisfactory completion and delivery of the intended product or service the staff performance
has to be evaluated. Document the lessons from the project. Prepare the reports on project feedback
analysis followed by the project execution report.

General practices involved in the above phases are:

The preparation stage involves the preparation and approval of project outline, project plan and
project budget.
The next stage involves selecting and briefing the project team about the proposals followed by
discussions on the roles and responsibility of the project member and the organization.
The feasibility or research stage will establish whether the project is feasible or not and establishes
the risk factors likely to be faced during the course of project execution and the related key factors
to overcome the problems.

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A detailed definition and plan for the project and its execution is prepared by the team and
coordinated by project Manager.

The final stage involves satisfactory delivery of the product/service to the customers. Upon
completion of the project, review is to be conducted by the project team along with the sponsors
and customers to discuss about the progress, performance and hurdles.

4. What are the seven principles of SCM?

Answer:

1. Group customer by needs- Effective SCM groups, customer by distinct service needs,
regardless of industry and then tailors services to those particular segments.

2. Customize the logistic network- In designing their logistics network; companies need to focus
on the service requirement and profit of the customer segments identified.

3. Listen to signals of market demand and plan accordingly- Sales and operations planners must
monitor the entire supply chain to detect early warning signals of changing customer demand
and needs. This demand driven approach leads to more consistent forecast and optimal resource
allocation.

4. Differentiate the product closer to the customer- companies today no longer can afford to
stock pile inventory to compensate for possible forecasting errors. Instead, they need to
postpone product differentiation in the manufacturing process closer to actual consumer
demand. This strategy allows the supply chain to respond quickly and cost effectively to change
in customer needs.

5. Strategically manage the sources of supply- by working closely with their key suppliers to
reduce the overall costs of owning materials and services; SCM maximizes profit margins both
for themselves and their suppliers.

6. Develop a supply chain wide technology strategy- as one of the cornerstones of successful
SCM information technology must be able to support multiple levels of decision making. It also
should afford a clear view and ability to measure the flow of products, services and information

7. Adopt channel spanning chain performance measures- Excellent supply chain performance
measurement system do more than just monitor internal functions. They apply performance
criteria to every link in the supply chain criteria that embrace both service and financial metrics,
including each account’s profitability.

5. Explain Bullwhip effect and how it could be prevented?

Answer:

An organisation will always have ups and downs. It is necessary that the managers of the
organisation keep track on the market conditions and analyze the changes. They must take

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decisions on the resources and make necessary changes within the organisation to meet the market
demands. Failing to do so may result in wild swing in orders. This may adversely affect functioning
of the organisation resulting in lack of coordination and trust among supply chain members. The
changes may affect the information and may lead to demand amplification in the supply chain. The
bullwhip effect is the uncertainty caused from distorted information flowing up and down the
supply chain. This has its effect on almost all the industries, poses a risk to firms that experience
large variations in demand, and also those firms which are dependent on suppliers, distributors and
retailers.

A bullwhip effect may also arise because of:

a. Increase in the lead time of the project due to increase in variability of demand.
b. Increase in the stocks to accommodate the increasing demand arising out of complicated
demand models and forecasting techniques.
c. Reduced service levels in the organisation.
d. Inefficient allocation of resources.
e. Increased transportation costs.

Measures to prevent bullwhip effect:

Bullwhip effect may be avoided by one or more of the following measures:

a. Avoid multiple demand forecasting.

b. Breaking the single orders into number of batches of orders.
c. Stabilising the prices, avoid the risk involved in overstocking by maintaining a proper stock.
d. Reduce the variability and uncertainty in Point Of Sale[POS] and sharing information.
e. Reduce the lead time in the stages of the project.
f. Always keep analysing the past figures and track current and future levels of requirements.
g. Enhance the operational efficiency and outsourcing logistics to a capable and efficient
agency.

6. What do you understand by Line Balancing? What is the importance of order picking
in material handling? Give suitable examples

Answer:

Productivity increases when product moves the various operations toward completion without any
holdovers. Balancing a variety of operation is the major concern which is addressed by design and
allocation of machines at workstations.

Material handling has become one of the important functions of operations management owing to
the necessity of making them efficient and economical. The necessity is the outcome of worldwide
outsourcing and meeting demands of a global market. Assemblies take place at various locations
and distribution is across the world. Many companies do not have main stores at their
manufacturing facilities. Suppliers deliver the required quantities to the places where they are
required for further processing or assembly. To reduce the inventory only required quantities have
to be made and delivered at appropriate times.

This necessitates that the flow lines are smooth. Balancing flow lines, different equipments to
achieve the same is the objective of line balancing.

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Production lines have a number of work enters in particular sequence so that the material that gets
processed has to move further without encountering any bottlenecks. The quantities processed the
rate of production at each centre, the number of operations and the total production required are
factors taken into account.

The purpose of balancing is to see that no shortages occur between work centres and minimum
inventory gets created. The principles of Linear Programming, JIT and Lean Manufacturing are
used to achieve these.

The importance of order picking in material handling

Order picking is a process by which items or products for which supply is to be made have to be
retrieved from specific storage locations. It is found to take 60% of labour activities in a
warehouse. Since it is critical to the business to meet customer’s demands accurately, lot of
attention is being given to this aspect of operations. In the manufacturing arena, we desire to move
towards small lot sizes, point of use delivery and cycle time reductions. Efficient order picking is
necessary for being competitive. In the supply chain, storage, retrieval, and delivery do not add
value to the product, but are necessary.

Types of equipments that help in bring efficiency to the process:

Horizontal Travel – These are in the aisle, picker to part systems. The picker, a worker walks or
rides a vehicle and pickers the item or product and puts into the vehicle, or conveyor. The storage
system could be pallet racks, shelves or gravity racks.

Person Abroad- In this system the picker is on a platform of a vehicle he can move up and also
horizontally along the aisle.

Part to Picker – these are mechanised systems here a storage / retrieval device carries the trays or
bins to the person picking. More than one picker can also access the system.

Special equipment – for high throughput and space efficiently special equipments are made which
are in the form of movable shelves, rotary racks mobile shuttles that travel in lanes.

Workplace equipment – items can be kept in work benches and be picked up. The carts are used to
keep items for being picked up.

Before implementing any of these systems, a detailed study of alternatives, a plan for expansion or
reduction will have to be considered. Some of these factors are:

A. Material Properties
– Size, weight and nest ability
– Carton counts, pallet counts
– Fragility
– Value
– Environment[ temperature, humidity]

B. System Requirements
– Volume per product
– Number of orders to be shipped

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– Response time
– Supporting processes [labelling, pricing]
– Growth factors

C. Economic factors
– Investment required
– Product life
– Rate of return

D. Design considerations
– Total number of products that are to be stored
– Number of products received per shift
– Total number of retrieved per shift
– Labour force
– Variability of the product
– Management Information System

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