A heuristic procedure for the integrated facility layout design and flow assignment problem

We present an efficient iterative heuristic procedure for solving the integrated layout design and product flow assignment problem. The layout design decisions involve planar location of unequal‐area machines with duplicates. The product flows are assigned to machines according to the product processing routes. The integrated decision problem is a nonlinear mixed integer model which cannot be efficiently solved using classical methods for large problems. We propose a novel integrated heuristic procedure based on the alternating heuristic, a perturbation algorithm and sequential location heuristic. Since the alternating heuristic between facility layout design and product‐machine assignment sub‐problems terminates with local optima, we developed a perturbation algorithm based on assignment decisions. The results of an experimental study show that proposed procedure is both efficient and effective in identifying quality solutions for small to very large‐sized problems.