A simulated annealing heuristic for the dynamic layout problem with budget constraint

Facility layout problem has been extensively studied in the literature because the total material handling cost can be a significant portion in the operational costs for a company and in the manufacturing cost of a product. Today’s severe global competition, rapid changes in technology and shortening life cycle of products force companies to evaluate and modify their facility layout in a periodic fashion. This type of layout problems is categorized as the dynamic facility layout problem (DFLP). As a realistic dimension of the problem, one has to consider also the limited budget to cover the cost of changing the layout. In this study, we propose a simulated annealing heuristic for the DFLP with budget constraint, and show the effectiveness of this heuristic on a set of numerical experiments.