Integrating facility layout with process selection and capacity planning

In planning a manufacturing system, many basic system design decisions are required. Included are selecting a manufacturing technology for each product type (process selection), determining maximum production levels of each product type (capacity planning), and locating production resources and routing of products to required resources (facility layout). In this paper, the authors examine the importance of integrating these decisions. Advantages of the integrated approach are illustrated. A mixed-integer mathematical formulation for the integrated model is suggested. The structure of the model shows how the overall problem can be decomposed as well as the interactions between the decision problems. A heuristic is proposed for the mathematical program and its performance is examined on several test problems. The quadratic assignment problem is shown to be a simple case of the integrated model.