In this paper, we present a formulation of the layout design problem where the objective is to minimize work-inprocess(WIP). In contrast to some recent research, we show that layouts obtained using a queueing-basedformulation can be very different from those obtained using the conventional quadratic assignment problem (QAP)formulation. For example, we show that a QAP-optimal layout can be WIP-infeasible. Similarly, we show thattwo QAP-optimal layouts can have vastly different WIP values. In general, we show that WIP is not monotonic inmaterial handling travel distances. This leads to a number of surprising results. For instance, we show that it ispossible to reduce overall distances between departments but increase WIP. Because WIP is affected by both meanand variance of travel times, we find that reducing variance can be as important as reducing average travel time.Furthermore, we find that the relative desirability of a layout can be affected by changes in material handling capacityeven when travel distances remain the same. More importantly, we show that the relative desirability of a layout canbe affected by non-material handling factors, such as department utilization levels, variability in departmentprocessing times, and variability in product demands.
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