CIE42 Proceedings, 16-18 July 2012, Cape Town, South Africa © 2012 CIE & SAIIE 264-1 A MATHEMATICAL MODEL FOR DESIGNING GROUP LAYOUT OF A DYNAMIC CELLULAR MANUFACTURING SYSTEM WITH VARIABLE NUMBER OF CELLS R. Kia 1* , N. Javadian 2 , R. Tavakkoli-Moghaddam 3 , A. Aghajani 2 1 Department of Industrial Engineering, Firoozkooh Branch, Islamic Azad University, Firoozkooh, Iran rezakia.ie@gmail.com 2 Department of Industrial Engineering, Mazandaran University of Science & Technology, Babol, Iran nijavadian@ustmb.ac.ir a_ofuniversity@yahoo.com 3 Department of Industrial Engineering, College of Engineering, University of Tehran, Tehran, Iran tavakoli@ut.ac.ir ABSTRACT This paper presents a mixed-integer non-linear mathematical model for designing group layout of a cellular manufacturing system in a dynamic environment with variable number of cells. Decision making of cell formation (CF) and group layout (GL), two major and interrelated decisions involved in the design of a CMS, are concurrently made under a dynamic environment in this study. Another compromising aspect of this model is finding the optimal number of cells which should be formed in each period to bring flexibility for the model to reduce forming cell costs. The proposed model incorporates several design features including alternate process routings, operation sequence, processing time, production volume of parts, purchasing machines, duplicate machines, machine capacity, lot splitting, intra-cell layout, inter-cell layout, multi-rows layout of equal area facilities, flexible reconfiguration of cells and variable number of cells. The objective function of the integrated model is to minimize the total costs of intra and inter-cell material handling, machine relocation, purchasing new machines, machine overhead, machine processing and forming cells. A numerical example taken from the literature is solved by the Gams software to illustrate the features of this model. * Corresponding Author