The integrated machine allocation and layout problem

Cellular manufacturing has received a considerable amount of attention in the research literature as an approach for improving the performance of manufacturing facilities. However, recent studies have shown that cellular layouts are not always superior to the traditional functional machine layout. We propose a model that does not require the machines to be placed in a functional layout or in a cellular arrangement, but allows the material flow requirements to dictate the machine placement. The model is formulated as an aggregation of the quadratic assignment problem and several network flow problems coupled with linear side constraints. A mixed integer program is presented to find the optimal solution for small problems, and heuristics are developed to solve larger problems. Computational results evaluating the quality of the solution methodologies are also presented.