This grant provides funding to develop and evaluate a new approach for evaluation of a facility layout. This approach will use a deterministic scheduling model to incorporate the time-based value of throughput delays into the traditional distance-based measures. The transportation and queuing delays that are absent in the traditional facility layout evaluation models will be modeled as communication delays in a generic manufacturing problem. The cost function in the scheduling algorithm will implicitly consider the traditional material handling and work-in-process costs as inventory carrying costs. An Activity Based Costing (ABC) approach will be adopted to quantify the setup, processing, material handling, and queuing components of order throughput time. New dispatching rules that treat the material handling delays as non-zero transfer delays between consecutive pairs of operations will be developed and evaluated. Extensive computational experiments will be conducted to study the sensitivity of the facility layout cost when different priority rules for order sequencing and dispatching are used. The performance of the model will be compared with those obtained using existing static and dynamic methods for evaluating layouts.
If successful, the results of this research will yield a comprehensive economic model for evaluating facility layouts that could be embedded in state-of-the-art software for computer-aided facility layout. Industry will get a more reliable means for layout evaluation and justification. Also, a new role for scheduling software is anticipated - that of evaluating capital-intensive facility layout/relayout projects. This would minimize the reliance on dedicated simulation software to evaluate facility layouts. A unifying cost basis will be established for any component of throughput time when a product is produced in a facility - setup, processing, loading/unloading, inspection, queuing, material handling, storage, etc. Instead of material handling costs only, future layout evaluation models will consider the opportunity costs of raw material, labor hours and equipment hours that are invested and the interest that those investments accrue over the period of time that the product moves through the facility.
