Facility Layout Utilizes The Maximum Space

1271 WordsAug 4, 20166 Pages
The project has been deemed technically and operationally feasible based on several factors: facility layout utilizes the maximum space; minimal material handling is involved during the manufacturing process; ease of availability of raw materials; access to trained manpower; and the location of plant is strategically positioned between Toronto and Montreal. Canadian automotive industry data was used for our financial analysis and applied to the Ottawa-Gatineau market. Within the first 2 years of operation, Alpha Machine Shop will achieve a projected revenue of $5 million, profits of $2.5 million. The payback period has been calculated as 3 years. The project NPV is 3037957 (at a 15% discount rate) and Internal Rate of Return is 40%.…show more content…
The major consideration around technical feasibility of operating the machine shop is the calibre of the machines themselves. They must be precise, highly efficient and consistent. The machines that have been selected are being imported from Italy because they are the best in their class with cutting edge technology. They produce parts with the highest of precision and very few errors over their operational lifetime. These machines require minimal maintenance and are easy to operate. A machine shop usually carries the minimum requirement for raw materials, as it otherwise would not be economically feasible. Only the most common materials, such as steel shapes, sheet metal, and fasteners are permanently stocked. Otherwise, most raw material is ordered on demand, so considerations should be made in advance to ensure raw material supply is available even on short notice. Fortunately, most raw materials can be readily supplied by nearby Ontario metal service centers, ferrous and nonferrous foundries. The average size machine shop is comprised of a dedicated workshop floor, lathe machines, turning machines, milling centres, a power distribution room, a tools room and an administration area complete with office facilities. Other facilities, such as machinist locker rooms, washrooms, dining hall and maintenance shed, typically round out the facility and provide good cross-usage potential. Facility layout for this machine shop has been
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