At this point I'm going to introduce a bad word: Compression. Compression is going to be the watchword throughout the design process. It is our evil but necessary friend. Why, you ask?
We can't hope to include a true scale model of almost any yard on our layouts any more than we can expect to have more than a few scale miles of track to represent a division of 100 or more prototype miles. Something has to be left out (for the railroad, usually the long, boring miles in between interesting spots) in order to fit it into the average layout room. Yards are no different -- they are big places with miles and miles of track, which we can't hope to model in its entirety.
Real classification yards are huge, often consisting of many smaller special-purpose yards that make up the whole complex. A common plan uses three separate double-ended yards strung one after the other to move traffic efficiently: an arrival yard, a classification yard, and a departure yard. As might be expected, an arrival yard is where arriving trains drop off the cars of their train. They are picked up there and moved to the classification yard, being switched back and forth as necessary to get the right cars onto the right trains. As the trains are built out, they are moved to the departure yard, where they get a new caboose and locomotive and proceed to their next destination. Often an identical set of yards will exist on the other side of the main, serving trains moving in the other direction.
Since (almost) no one can model this, it's necessary to compress the essence of the operation down to a manageable and modelable level. What most folks do is compress the three yards into the space of one, forcing one or two tracks to do the work of many miles of prototype track. as you might imagine, this makes for a lot of pressure on the people you choose to operate your yard. They will often have to do nearly as much work as a prototype crew to get through a session.
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