This paper argues that it is essential to consider explicitly the main
elements of manufacturing costs in designing cellular manufacturing s
ystems. Consequently, a mixed linear program is introduced to help sol
ve the cell formation problem where the objective is to minimise the s
um of these cost elements. A method to determine its optimal solution
is proposed as well as an adaptation of the simulated annealing algori
thm designed to achieve good approximate solutions. Finally, a quick a
ssessment of the performance of this simulated annealing adaptation is
provided.