Facility Layout to Support Just-in-Time

In this paper, we develop a heuristic algorithm based on Benders' Decomposition to solve a version of the facility layout problem with decentralized shipping/receiving (s/r). Multiple s/r areas are allowed along the perimeter of the facility and each department can be serviced by the closest s/r area. Our work on this problem was motivated by just-in-time systems which require that frequent trips be made with small move quantities. In such circumstances, the use of decentralized s/r areas can significantly decrease material handling costs. We study a version of the problem in which the dimensions and locations of rectangular departments must be determined (subject to constraints), and each department must be simultaneously assigned to the nearest s/r area. The objective is to minimize the total cost of moving materials between pairs of departments, and between the departments and their respective s/r areas. Computational results for problems with up to 30 departments are reported.