Abstract: | This study develops an approach to cell formation decisions for cellular manufacturing layouts in group technology settings. An optimal 0–1 integer programming model is used to provide an analysis for determining which machines and parts should be assigned to cells in cellular manufacturing layouts. This approach minimizes the cost of manufacturing exceptional parts outside the cellular system, subject to machine capacity constraints. Part–machine matrices are partitioned into disconnected cells and use far fewer 0–1 variables than earlier approaches. Formulation of the model is described with a numerical example and computer solutions to realistic problems are obtained. The characteristics of computer run times, model performance, and applications of the model are discussed. |