Quadratic assignment problem with adaptable material handling devices

The traditional quadratic assignment problem assumes handling costs between two facilities are directly proportional to the distance between them. This linearity assumption is, in general, untrue in actual industrial settings due to changing equipment requirements as the distance between facilities changes. Therefore, this paper presents a model that reflects actual industrial practice in the design of layouts, assignment of departments to sites, and the selection of proper mode of handling between departments in response to the distances between department pairs. The paper discusses how data can be represented to make it easier to develop such a model and shows the methodology to solve the model. The paper concludes with an analysis of modelling error as a way to illustrate the cost associated with applying the wrong model as seems to be reflected in the traditional applications of the model.