Design of flexible plant layouts

In this paper, we present an approach for the design of plant layouts in st ochastic environments. We consider systems where the product mix and produc t demand are subject to variability and where duplicates of the same depart ment type may exist in the same facility. In contrast to a job shop layout, we allow these duplicates to be placed in non-adjacent locations on the pl ant floor and for flow allocation between pairs of individual departments t o be made as a function of the layout and the product demand realization. W e present a scenario-based procedure that iteratively solves for layout and flow allocation. We show that having duplicates of the same departments, w hich can be strategically located in different areas of the plant floor, ca n significantly reduce material handling cost while effectively hedging aga inst fluctuations in flow patterns and volumes. We show that the effect of duplication is of the diminishing kind, with most of the cost reduction occ urring with relatively few duplicates. We also show that the quality of the obtained layouts can be quite insensitive to inaccuracies in estimating de mand scenario probabilities.