A two-stage model for cost effective part family and machine cell formation

This research presents, implements and tests a two-stage procedure for cost effective part family and machine cell formation. First, the problem is formulated as a mixed integer mathematical model for simultaneous machine grouping and part family assignment. This model, which we refer to as the single-stage model, considers the cost trade-offs of cell configuration, machine procurement and salvage, subcontracting, inter-cell movement, and capital investment, all of which reflect the significance of real life planning aspects. To alleviate the computational burden of this single-stage model, we decompose it into two stages: the first stage is a heuristic for machine cell and part family formations; the second stage integrates the heuristic method with a mathematical program to optimize the various cost aspects. The efficacy of the proposed models is shown through a number of example problems. The results show that the two-stage procedure is powerful in the planning stages of large-size problems where the cost aspects are crucial.