Today's consumer market demands that manufacturers must be competitive. This requires the efficient operation of manufacturing plants and their ability to quickly respond to changes in product mix and demand. Studies show that material handling cost makes up between 20 and 50 percent of the total operating cost. Therefore, this thesis considers the problem of arranging and rearranging (when there are changes in product mix and demand) manufacturing facilities such that material handling and rearrangement costs are minimized. This problem is called the dynamic facility layout problem. In this thesis, three simulated annealing heuristics are presented for the dynamic facility layout problem. The first is the direct implementation of the simulated annealing algorithm. The second heuristic uses a reheating strategy within simulated annealing. The third heuristic combines the simulated annealing algorithm, time windows concept, and the backward pairwise exchange method. The performance of the heuristics was evaluated using two measures: solution quality and computational time. Results obtained show that the proposed heuristics are effective for the dynamic facility layout problem.
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