A new optimization model to support a bottom-up approach to facility design

The facility layout problem is typically solved in what is referred to as a “top-down approach” of block layout design followed by detailed layout determination. However, a number of research efforts recently have challenged this approach, producing a reformulated bottom-up approach to the facility layout problem. In this paper we consider the bottom-up approach, applying a tighter formulation than prior efforts and investigating the solvability limits of the new model. Empirical testing of the new bottom-up layout model indicates that although this model produces more usable output, as judged by industry experts, it is approximately three times harder to solve. Valid inequalities and special cases are identified to help improve the formulation's solvability.