Monte Carlo simulation methods for dynamic line layout problems with nonlinear movement costs

Abstract

Monte Carlo simulation provides a risk management tool for solving line layout problems when material flow requirements change over time and/or are uncertain. This study demonstrates this capability for line layout problems where material handling costs are not directly proportional to the distance travelled, e.g., where individual material moves impose a fixed cost which is amortised over the length of the move. Nonlinear movement costs are modelled using a movement 'discount factor' embedded in a Monte Carlo simulation model that is used to identify solutions performing at high, although not necessarily optimal, levels across a range of operating conditions. The procedure is demonstrated through a series of sample problems. [Received 09 September 2008; Revised 26 November 2008; Accepted 01 December 2008]