This paper presents a new model that integrates design and planning to
prescribe a cost-effective cellular configuration that is responsive
to real-world considerations. The model incorporates practical enginee
ring features such as the finite capacity of machines, use of alternat
ive machines, multiple ''copies'' of a machine type, and limitations o
n cell size. It integrates design decisions, locating machines in each
cell and identifying product families, with planning considerations,
ensuring that machine capacities are sufficient to produce required vo
lumes and dealing with between-cell movement to use alternative machin
es. Computational experience using a commercially available optimizati
on package demonstrates that run time required to resolve problems of
realistic size and scope can be quite reasonable.