Design of flexible plant layouts

In this paper, we present an approach for the design of plant layouts in stochastic environments. We consider systems where the product mix and product demand are subject to variability and where duplicates of the same department 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 plant floor and for flow allocation between pairs of individual departments to be made as a function of the layout and the product demand realization. We present a scenario-based procedure that iteratively solves for layout and flow allocation. We show that having duplicates of the same departments, which can be strategically located in different areas of the plant floor, can significantly reduce material handling cost while effectively hedging against fluctuations in flow patterns and volumes. We show that the effect of duplication is of the diminishing kind, with most of the cost reduction occurring with relatively few duplicates. We also show that the quality of the obtained layouts can be quite insensitive to inaccuracies in estimating demand scenario probabilities.