This paper considers the machine-part clustering under the assumption of al
ternative process plans for each part. Kusiak's p-median model of part fami
ly formation dealing with the problem has critical disadvantages in that th
e model requires too many binary variables and constraints and the number o
f part families must be known in advance. Furthermore, the solution quality
of the model in terms of the number of exceptional elements is poor for il
l-structured problems. Motivated by Viswanathan's work, this paper proposes
two new p-median models using new measures of similarity between machine p
airs: one with the prespecified number of cells and the other without the p
respecified number of cells. Computational experience shows the applicabili
ty of new p-median models of machine cell formation over Kusiak's model.