System setup problems in flexible manufacturing systems deal with short-term planning problems such as part type selection, machine grouping, operation assignment, tooling, fixture and pallet allocation, and routing. In this article, we consider three of the subproblems: part type selection, machine grouping, and loading. We suggest a heuristic approach to solve the subproblems consistently with the objective of maximizing the expected production rate. The proposed procedure includes routines to generate all possible machine grouping alternatives for a given set of machines, to obtain optimal target workloads for each grouping alternative, and to allocate operations and tools to machine groups. These routines are executed iteratively until a good solution to the system setup problem is obtained. Computational experience is reported.
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