A facilities layout, also called plant layout, consists of the production areas, production related or support areas and personnel areas within the building. Plant layout design is one of the strategic fields that determine the long run efficiency of operation. Layout determines the way in which materials and other inputs (like people and information) flow through the operation. Relatively small changes in the position of a machine in a factory can affect the flow of materials considerably. This in turn can affect the costs and effectiveness of the overall manufacturing operation. Getting it wrong can lead to inefficiency, inflexibility, large volumes of inventory and work in progress, high costs and unhappy customers. Changing a layout can be expensive and difficult, so it is best to get it right first time. Replacement problem fall into two categories depending upon the life pattern of the equipment involved that is whether the equipment wear out or become obsolete with time (because of constant use or new technological developments) or suddenly fails.