FACILITY LAYOUT & LOCATIONASSIGNMENT

SUBMITTED TO:-

DR. DURGESH BATRASUBMITTED BY:-DIVYA SINGH RAJPUTMBA 2 ND SEM ,SEC A

2016

INTRODUCTIONShopping centers are widely spread across the world, and are hotspots that attract different demographics to spend quality time, perform all kinds of activities, or to perform all kinds of purchases. Shopping centers simulates the complexity and vitality of a city center without the noise, dirt, and confusion . Victor Gruen, the architect of the first shopping center, proposed the center as the basic unit of urban planning, where he designed the suburban center to be the nucleus of subsequent developments. Shopping centers were introduced not only as retail environment, but also as public spaces that permit access to all members of the community. The idea of the shopping center evolved from the classical open market spaces as shopping and communication spaces, through department and chain stores, reaching the modern environmentally controlled form of that shopping space called ‘mall’.

Shops (entities) are assigned to available locations in the center in a way that ensures foot-traffic is evenly distributed across all shopping center areas. Thus, increasing rent returns, profitability, and success of the shopping center.

A. Shopping centers :-There are three physical configurations of shopping centers. First is the open air center, where all shop entrances are on open air space. Second is the mall, which is an enclosed space, where all shops entrances are facing the interior. The third type is the hybrid center, which combines features of the two previous configurations. The first two configurations are further classified into eight types according to size and goods sold. For malls, there are the regional center and the super-regional center. For open air centers, there are the neighborhood center, the community center, the power center, the theme/festival center, the outlet center, and the lifestyle center. Shopping centers have many design issues, one of which is the financial aspects of the design commitment of shopping center owners/developers to financial return over a long period of time. Given this long term commitment, there is greater interest in ensuring profitability on an ongoing basis, which in turn encourages high quality design. Another design issue to consider is the financial viability of the center. Shopping centers are affected by changes in the market, including level of competition. Although competition risk is acknowledged in feasibility analysis, but changes to the retail hierarchy resulting from poor planning decisions is a risk that cannot be predicted. Given the significant amounts of capital required to develop and redevelop a shopping center, the developer needs to be confident that there is no unforeseen threat to achieving an appropriate return on their investment. Considering these two issues gives rise to the need to develop shopping center layouts that can ensure, among other requirements, that facility entities will receive maximum customer flow to increase profitability.

B. Facility layout problem:- Facility layout planning plays a crucial role in the success and profitability of any organization; an effective layout can minimize costs substantially, which

leads to improvement in overall performance. A facility is an entity that facilitates the performance of any task, and the facility layout is the arrangement of everything needed for production of goods or delivery of services in that facility. “Layouts are not only concerned with improved utilization of buildings and land but are very much concerned with increasing sales. In the retail environment, layouts must be customer focused and displays should attract the attention of the purchasing public.” The common approach for solving the facility layout problem is to assign entities to locations with the objective of minimizing the material handling distances/costs. This has been done by evaluating the distances/trips to/from different entities at the assigned locations. Other facility layout models have also considered the objective of maximizing the flow through facility entities.

C. Maximum flow capturing problem:- The maximum flow capturing problem discusses the flow in a system, where entities should capture portions of that flow . The portion of flow that each entity captures depends on its weight, which is interpreted as the power to capture flow. Accordingly, the maximum flow capturing problem can be utilized in shopping center location assignment problems. The objective in this case would be to ensure that each assigned shop’s share of customer visits (flow) is maximized, while maintaining the flow balance across different areas (blocks) that accommodate these shops.

Fong presented a configuration (morphological) analysis of shopping malls and a study of the extent to which location of attractors affects movement through the mall. The author discussed the idea of a mall that offers unique shopping experience at several stores under one roof along with entertainment tools, and that the idea of the shopping mall was derived from the city center. Shopping malls usually follow the dumb-bell concept (Fig. 1), in which large stores (anchors) are placed at the ends of the mall to work as customer magnets. This creates an artificial flow between anchors, producing flow at the smaller stores, and simulating the natural movement in the streets. In theory, in a shopping mall, all locations are good. The shopping mall owner's main concern is usually to optimize rent return by generating equally distributed foot-traffic for all shops in the mall, not only those who can afford exceptional locations. Accordingly, the layout design process should take this into consideration to achieve a tenant mix that leads to the success of the center by ensuring maximum benefit for all occupants.

Brown introduced a study that discusses functionality problems of real estate and the relationship with configuration. Space syntax was presented as a way to describe the configuration of a failed shopping mall due to poor design, and was represented by a mathematical network. The study compared the failed mall with another nearby mall, and it showed that it is not important how big the mall is, but what matters is how the public area of the mall makes the goods sold more accessible to shoppers. With equal effort, shoppers would access more store entrances in the nearby mall than the failed one. Also, mall entrances allowed shoppers deep into the nearby mall, and kept them on the edges at the failed one. The author also discussed the importance of store entrance being on a core

space (potential high movement rates) or a fringe space (less movement rate where most vacant stores are found) for the success of the store. There is a common tendency to locate large anchor stores in fringe areas to benefit from their high market capability. It was emphasized that the design of the failed mall made each store only represent itself as if it is a stand-alone store not part of a mall, disabling the concept that the foot-traffic at each store will inevitably generate foot-traffic at surrounding stores. In other words, separating mall areas lead to mall failure. Yin, Xu, and Ng [8] discussed the relation between shop size, tenant type, and location in the shopping mall. It was found that the vertical expansion in mall size, by increasing the number of floors, increases owner concern if shoppers will reach higher floors or not. The author classified the shops into non-impulse trades that consumers will usually head to with a plan of specific purchases, and impulse trades that consumers visit only as a last minute decision to purchase a product. The results showed that more nonimpulse trades are found at higher levels in the shopping mall. The study concluded that shoppers can be encouraged to go to the upper floors by placing shops of non-impulse trade and anchors at the upper floors.

Fong discussed suitable locations of different shop categories (tenant mix) according to type of shop activities and goods inside the shopping center. He enumerates rules to assign certain shops to certain locations on the shopping center layout, such as fashion shops to be located in main mall and service stores to be in less attractive locations. The author claims that managers and decision makers pay attention to placement of anchors and major shops, leaving the decision about non-anchors and less important shops to the leasing agents, which may arise some problems in the matter of shops placement rules. The objective of the study is to test the locations of each category of stores in order to define certain “general rules” that apply to most of the sample shopping centers. The question asked is should stores of a certain category be gathered beside each other, or should they be separated through the whole shopping center layout. After studying different store types in seven shopping malls, it is concluded that there are no certain location rules that stores placement follow. The study suggests deciding on stores location by simulating the dynamics of ecology, study of organism interactions, as studying the effect of a store location on every other store (store-to-store interactions). The method highlights that competing stores can be placed apart and stores of different types of activities can be placed near each other. The author concludes that choosing stores’ locations is a skill of the shopping mall manager more than being a scientific decision.

Kusiak and Heragu presented a survey of the different formulations and solution algorithms that can be used to solve the facility layout problem in manufacturing systems. The study enumerates the types of models that can be utilized and provided a summary of each. It also classified the solution algorithms into optimal and suboptimal algorithms and showed that facility layout problems are hard to solve with optimal algorithms because of time constraints. A comparison between twelve heuristic algorithms for eight test problems was included, and an analysis of solution quality and computation time was provided.

Feizollahi and Feyzollahi discussed the classical quadratic assignment problem (QAP), in which a set of facilities are assigned to a set of locations in a way that achieve the required flow between facility pairs and minimizes cost of material handling. The study discussed the QAP problem with uncertain flow of material. The authors introduced a robust solution for a set of uncertain flow possibilities.

Rosenblatand and Golany proposed a new approach for the facility layout problem other than solving the classical quadratic assignment problem (QAP). The approach depends on assigning distances to pairs of departments and formulating a minimum cost network problem. The formulation takes advantage of network theory and algorithms. This distance assignment problem (DAP) uses the flow in the network to represent the distance assigned to department pairs. The study provides a solution algorithm consisting of three phases. In the first phase, the distance parameters between departments are determined, where in the second phase these distances are optimized. The third phase is concerned with interpreting the obtained optimal distances into facility layout assignments.

Solimanpur and Jafari discussed the concept of two dimensional layout, where the problem is concerned with the arrangement of manufacturing facilities into different layout patterns taking into consideration some factors, such as machine dimensions and capacity. The layout is optimized according to distance or cost minimization measures. The study uses a nonlinear mixed integer programming model with a total distance minimization objective, in a two-dimensional layout arrangement. The model takes into consideration the required clearance between machines.

Amaral discussed the single row facility layout problem (SRFLP), where departments are assigned on a line or one side of a certain path, with the objective of minimizing the weighted sum of the distances between departments. The distances between departments in the facility are measured between their centres. The author also discussed the special case of the SRFLP, the linear ordering problem (LOP), where the distance between all departments is unit length. The study presents a new mixed-integer linear programming model for the problem to facilitate a more efficient solution.

Hassan discussed the problem of layout design and how it affects the pedestrian flow. He argued that previous work either studied the layout design or pedestrian flow, but not both problems simultaneously. The author used simulation tools to study different layout designs and the resulting effect on pedestrian flow. The study focused on flow in normal situations not congestion in panic situations. The author also discussed the effect of appropriate design in a shopping mall on the profit. It was concluded that a good design will produce smooth flow and maximize the flow across the layout spaces.

Hua, Cheng, and Wang presented the maximum capture problem (MAXCAP), which is concerned with locating new stores in a competitive market, with the objective of maximizing the market share for the new stores, which is in turn captured from other

competitors’ share. The authors listed previous studies that extend the MAXCAP problem with the assumption that stores might have equal or different weights, or with the assumption that competitors will react to the new entry to the market. The model objective is to maximize total market share captured from competitors with respect to total cost, including fixed and transportation costs. The authors emphasized the practical superiority of the concept of maximizing capture per unit cost over maximizing profit.

work as restaurants or cafes. This reflects the real practice in which some entities are desired to be assigned to certain locations while others can be assigned freely to any location but under the objective of maximizing flow. These entities are constrained by certain required features such as size, certain facilities, or location on a view. Attraction points in the layout have a high weight as their attraction power is high, and they are different from special locations-entities as special locations-entities can be of any category of weight. The objective is to ensure balanced foot-traffic across the whole facility, by maximizing the flow of customers captured by each entity in its assigned location. The layout is separated into areas (blocks), where attraction points work as magnet to visitors, creating flow through the whole block, resulting in flow across other smaller stores. At the same time the average flow of all blocks is maximized. The model exploits the fact that each entity assignment to a location affects the flow in the whole facility. Thus, each entity is assigned a weight we that is related to its power of attraction (high, medium, or low), and is deduced from market research on the effect of different entity types. A location i’s share of customer flow is measured by the location flow factor fi. fi is measured in reference to the weight of the entity assigned to it and the weights of entities assigned to all other locations, and the distance from these locations to location i. Accordingly, an empty location’s share of flow is determined only by its distance from other assigned locations that capture flow by themselves and share it with other locations, such that an assigned location’s flow effect (ability to induce flow) is higher on nearby locations and less on farther locations. A flow factor Fb is also defined for each block b as the sum of location flow factors of all locations in block b. The model minimizes the maximum difference between block flow factors to ensure balanced flow across the whole facility. The following assumptions are made: • Bi-directional flow is allowed. • All locations have a unit area and the center point of a location is used as reference point to that location. • The distance from a location to itself is set to one not zero to avoid dividing by zero when calculating the flow factor. • Adjacent locations are equally spaced.

FACILITY LOCATION –TRITON MALL

MARKET FACTOR –

1. PROXIMITY OF CUSTOMER-

The mall is established near to the main residential area like Jhotwara, Vidyadhar Nagar etc.

2.FOOT TRAFFIC: -The pedestrian traffic outside a potential location at different times of the day and on different days of the week meets your needs.

3. ACCESSIBILITY AND PARKING:-

Consider how accessible the facility will be for everyone who'll be using it—customers, employees and suppliers. how easy is it for cars to get in and out of your parking lot? Is the facility accessible to people with disabilities? What sort of deliveries are you likely to receive, and will your suppliers be able to easily and efficiently get materials to your business? Small-package couriers need to get in and out quickly; trucking companies need adequate roads and loading docks if you’re going to be receiving freight on pallets.

4. COMPETITION:-Are competing companies located nearby? Sometimes that’s good, such as in industries where comparison shopping is popular. And there are different competitors nearby the triton like vishal mega mart, national handloom etc.

5.Huge space:-

Location should have the right amount of parking you need to support your customer flow. . This is because you probably either have just a few customers at a time, or customers typically spend only 10-15 minutes in your business, quickly opening up the parking spot for the next customer.

6. RIGHT AMOUNT OF TRANSPORT FACILITY:-

There is good transport facility nearby the triton mall by bus or auto etc.

LOCATION FACTOR:-Considering an already designed shopping mall, it is required to assign stores (entities) to available locations. The objective is to ensure that all areas of the mall will have an appropriate share of flow (customers’ visits), and that all locations are desirable, in order to increase rent returns, and thereby profitability and success of the shopping centre. The layout is divided into occupied locations and available (free) locations. An example of such arrangement is shown in Fig. 2. The occupied locations are usually allocated for entrances and exits, restrooms, and attraction points (food court, cinema, famous brand stores, etc.).The available locations are to be assigned to shops, categorized into high, medium, and low according to their attraction power. In addition, there are locations that can only be assigned to special entities, such as locations that can only work as restaurants or cafes. This reflects the real practice in which some entities are desired to be assigned to certain

locations while others can be assigned freely to any location but under the objective of maximizing flow. These entities are constrained by certain required features such as size, certain facilities, or location on a view. Attraction points in the layout have a high weight as their attraction power is high, and they are different from special locations-entities as special locations-entities can be of any category of weight. The objective is to ensure balanced foot-traffic across the whole facility, by maximizing the flow of customers captured by each entity in its assigned location. The layout is separated into areas (blocks), where attraction points work as magnet to visitors, creating flow through the whole block, resulting in flow across other smaller stores. At the same time the average flow of all blocks is maximized. The model exploits the fact that each entity assignment to a location affects the flow in the whole facility. Thus, each entity is assigned a weight we that is related to its power of attraction (high, medium, or low), and is deduced from market research on the effect of different entity types. A location i’s share of customer flow is measured by the location flow factor fi. fi is measured in reference to the weight of the entity assigned to it and the weights of entities assigned to all other locations, and the distance from these locations to location I. Accordingly, an empty location’s share of flow is determined only by its distance from other assigned locations that capture flow by themselves and share it with other locations, such that an assigned location’s flow effect (ability to induce flow) is higher on nearby locations and less on farther locations. A flow factor Fb is also defined for each block b as the sum of location flow factors of all locations in block b. The model minimizes the maximum difference between block flow factors to ensure balanced flow across the whole facility. The following assumptions are made:

• Bi-directional flow is allowed.

• All locations have a unit area and the centre point of a location is used as reference point to that location.

• The distance from a location to itself is set to one not zero to avoid dividing by zero when calculating the flow factor.

• Adjacent locations are equally spaced.

FACTORS:-1. Shopping Centre Characteristics:- Shopping centers are distinctly different from the other two major locations--that is, downtown and local business strips. The shopping centre building is pre-planned as a merchandising unit for interplay among Tenants. Its site is deliberately selected by the developer for easy access to pull customers from a trade area. It has on-site parking as a common feature of the layout. The amount of parking space is directly related to the retail area. Customers like the shopping centre's convenience. They drive in, park, and walk to their destination in relative safety and speed. Some shopping centers also provide weather protection and most provide an atmosphere created for

shopping comfort. For the customer, the shopping centre has great appeal. For the merchant making a decision whether or not to locate in a shopping centre, these "plus" characteristics must be related to the limitations placed upon you as a tenant. In a shopping centre, a tenant is part of a merchant team. As such, you must pay your pro rata share of the budget for the team effort. You must keep store hours, light your windows, and place your signs within established rules.

2. What Are Your Chances? :-

Whether or not a small retailer can get into a particular shopping centre depends on the market and management. A small shopping centre may need only one children's shoe store, for example, while a regional centre may expect enough business for several. The management aspect is simple to state: Developers and owners of shopping jos look for successful retailers. In finding tenants whose line of goods will meet the needs of the desired market, the developerowner first signs on a prestige merchant as the lead tenant. Then, the developer selects other types of stores that will complement each other. In this way, a "tenant mix" offers a varied array of merchandise. Thus, the centre's competitive strength is bolstered against other centers as well as supplying the market area's needs. To finance a centre, the developer needs major leases from companies with strong credit ratings. The developer's own lenders favor tenant rosters that include the triple-A ratings of national chains. However, local merchants with good business records and proven understanding of the local markets have a good chance of being considered by a shopping centre developer. But even so, a small independent retailer can sometimes play "hard to get." When most spaces are filled, the developer may need you to help fill the rest of them. If you are considering a shopping centre for a first-store venture you may have trouble. Your financial backing and merchandising experience may be unproved to the owner-developer. Your problem is to convince the developer that the new store has a reasonable chance of success and will help the "tenant mix."

3. What Can the Centre Do for You?:-

Suppose that the owner-developer of a shopping centre asks you to be a tenant. In considering the offer, you would need to make sure of what you can do in the centre. What rules will there be on your operation? In exchange for the rules, what will the centre do for you? Even more important, you must consider the trade area, the location of your competition, and the location of your space in the centre. These factors help to determine how much business you can expect to do in the centre. In a Neighborhood Shopping Centre, the leading tenant is a supermarket or drug store. The typical leasable space is 50,000 square feet but may range from 30,000 to 100,000 square feet. The typical site area is from 3 to 10 acres. The minimum trade population is 2,500 to 40,000. In a Community Shopping Centre, the leading tenant is a variety/junior department store or discount department store. The typical leasable space is 150,000 square feet but may range from 100,000 to 300,000 square feet. The typical site area is 10 to 30 acres. The minimum trade population is

40,000 to 150,000. Women’s Enterprise Centre On-Line Resource Library www.womensenterprise.ca Page 3 In a Regional Shopping Centre, the leading tenant is one or more full-line department stores. The typical leasable space is 400,000 square feet with a range from 300,000 to more than 1,000,000 square feet. The typical site area is 30 to 50 acres. The minimum trade population is 150,000 or more. When the regional centre exceeds 750,000 square feet and includes three or more department stores, it becomes a SUPER-REGIONAL CENTRE.

The Centre's Location In examining the centre's location, look for answers to questions such as these:

Can you hold old customers and attract new ones?

Would the centre offer the best sales volume potential for your kind of merchandise?

Can you benefit enough from the centre's access to a market? If so, can you produce the appeal that will make the centre's customers come to your store?

Can you deal with your logical competition? To help answer such questions, you need to check out:

the trade area and its growth prospects;

the general income level in the trade area;

the number of households;

the share of various age groups in the population.

If your line were clothes for young women, for example, you would not want to locate in a centre whose market area contains a high percentage of retired persons. Make your own analysis of the market, which the developer expects to reach. In this respect, money for professional help is well spent, especially when the research indicates that the centre is not right for your type of operation. Your Space Determine where your space will be. Your location in the centre is important. Do you need to be in the main flow of customers as they pass between the stores with the greatest customer pull? Who will be your neighbors? What will be their effect on your sales? How much space is also important Using your experience, you can determine the amount of space you will need to handle the sales volume you expect to have in the shopping centre. And, of course, the amount of space will determine your rent. Many merchants need to rethink their space requirements when locating in a shopping centre. Rents are typically much higher and, therefore, space must be used very efficiently. Total Rent In most non-shopping centre locations, rent is a fixed amount, which has no relationship to sales volume. In shopping centers, the "rent" is usually stated as a minimum guaranteed rent per square foot of leased area against a percentage. Typically, while this is between 5 and 7 percent of gross sales, it varies by type of business

and other factors. This means that if the rent as calculated by the percentage of sales is higher than the guaranteed rent, the higher amount is the rent. If it is lower than the guaranteed rent, then the guaranteed rent is the amount paid. But this guarantee is not the end. In addition, you may have to pay dues to the centre's merchant association. You may have to pay for maintenance of common areas. Consider your rent, then, in terms of "total rent." If, and when, this "total rent" is more than your present rent, your space in the centre, of course, will have to draw sales enough to justify the added cost. Finishing Out Generally, the owner furnishes the bare space. You do the "finishing out" at your own expense. In completing your store to suit needs, you pay for light fixtures, counters, shelves, painting, and floor coverings. In addition, you may have to install your own heating and cooling units. (Your lease should be long enough to pay out your "finishing out" expense.) An innovation is the "tenant allowance." By this system, landlords provide a cost allowance towards completion of space. It is for storefronts, ceiling treatment, and wall coverings. The allowance is a percentage of their cost and is spelled out in a dollar amount in the lease. Some developers help tenants plan storefronts, exterior signs, and interior color schemes. They provide this service to insure storefronts that add to the centre's image rather than subtracting from it.

4. Types of Shopping Centres :-Because each planned shopping centre is built around a major tenant, centers are classed, in part, according to this leading tenant. According to tenant makeup and size, there are three types: neighbourhood, community, and regional.

Neighbourhood:- The supermarket or the drugstore is the leading tenant in a neighbourhood centre. This type is the smallest in size among shopping centres. It caters to the convenience needs of a neighbourhood.

Community :-Variety, junior department stores, or discount department stores lead in the next bigger type--the community centre. Here, you find room also for more specialty shops, need for wider price ranges, for greater style assortments, and for more impulse-sale items. In recent years the community centre has also been designed around the home improvement department store which combine hardware, lumber, electrical, plumbing, flooring building materials, garden supplies, and a variety of other goods under one roof. The shops that are grouped around this type of anchor tend to be similar in character and may include custom kitchen and bath shops, upholstery, bedding, drapery, and other such shops. While this type of centre tends to meet the Community Shopping Centre definition as to floor area and site size, its market may be more like a regional centre.

Regional :-The department store, with its prestige, is the leader in the regional centre--the largest type of shopping centre. When you find that a second or third department store is also locating in such a centre, you will know the site has been selected to draw from the widest possible market area. Super-Regional Centres have been developed with as many as

5 department stores. You will find, too, that the smaller tenants are picked to offer a range of goods and services approaching the appeal once found only downtown.

The latest development in regional shopping centres is the enclosed mall. This type of centre is designed to shut out the weather and to serve a larger trade area than other regional centres. Customers enjoy the open storefronts, the easy entrance, and the "all-weather" shopping. Tenants enjoy more centre-wide promotions because of weather control. An enclosed air-conditioned mall enables you to merchandise the full width of your store. The whole store becomes a display area, eliminating window backing and expensive display settings. You can rely on sliding doors or an overhead open drop grill for locking up the store. If you are considering a mall, you should weigh the benefits against costs. At the outset, it may be difficult to measure savings, such as the elimination of storefronts, against costs, for example the cost for heating and air-conditioning in the enclosed mall. Specialty Theme Shopping Centres In addition to the three major categories of shopping centres new types of centres are evolving that have been called specialty or theme centres. In general these centres do not have a major anchor tenant. There is a greater percentage of restaurants end specialty food stores, the other stores tend to be highly specialized with more imported goods, custom crafted goods, designer clothes etc. Also, a greater number of the merchants are independents. Unusual and interesting architectural design is a normal characteristic and frequently a tourist market rather than a resident market exists.

LOCATION FACTORS CONSIDERED WHILE DECIDING TRITON MALL

Proximity of consumers around the location which helps to earn more profits. It is located in the middle of Jaipur city where you can easily reach anytime. Proximity of big malls around the triton mall which creates toughest competition

among them. Goods supplied in the shops can easily reached at their right place and it reduces the

transportation cost also and maximize the profit.