lit this paper, rue develop a heuristic algorithm based on Benders' De
composition to solve a version of the facility layout problem with dec
entralized shipping/receiving (s/r). Multiple s/r areas are allowed al
ong the perimeter of the facility and each department can be serviced
by the closest s/r area. Our work on this problem was motivated by jus
t-in-time systems which require that frequent trips be made with small
move quantities. In such circumstances, the use of decentralized sir
areas can significantly decrease material handling costs. We study a v
ersion of the problem in which the dimensions and Locations of rectang
ular departments must be determined (subject to constraints), and each
department must be simultaneously assigned to the nearest s/r area. T
he objective is to minimize the total cost of moving materials between
pairs of departments, and between the departments and their respectiv
e s/r areas. Computational results for problems with up to 30 departme
nts are reported.