A performance measurement framework and solution approach for the integrated facility layout problem with uncertain demand

The integrated facility layout problem (IFLP) focuses on the simultaneous determination of the relative locations of multiple copies of capacitated equipment or machinery in a facility, as well as the material flow between these units. In this paper, we consider the IFLP in the existence of uncertain demand for the products of the facility. Motivated by the framework for next generation facility layouts by Benjaafar et al. (2002), we extend the approaches in the literature for distributed facility layouts to the case of dynamic demand and the possibility of relay outs, and propose a heuristic solution approach to minimize the expected total material handling cost over the planning horizon. We also analyze the performance of the resulting solutions in terms of empty travel of the material handling equipment and waiting time. Our computational results reveal that when demand is dynamic and stochastic, the relationship between the level of uncertainty and relay out cost plays an important role in determining layout performance, and therefore a priori assumption of using a certain layout type may lead to detrimental results.