Layout optimization considering production uncertainty and routing flexibility

Abstract

The unequal area facility layout problem is studied considering both production uncertainty and routing flexibility. Stochastic production quantities are introduced under the assumption of dependent demands and incorporated into the usual objective of material handling cost minimization. Concurrently, alternative routings are considered based on production quantity. An efficient simulation approach is used to estimate the resulting department pairwise flows, both their expected values and variances. Using these estimates, a tabu search heuristic procedure performs the layout design optimization.