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Abstract
In this paper we develop two mathematical models to capture the complexity of two important planning problems in Group Technology (GT) Manufacturing Systems, namely, cell formation and part routing selection. Research published so far treats the two problems independently in a hierarchical manner. We treat them as two equally important decisions and develop a 0–1 integer programming formulation to select part routing and to form cells based on total system costs defined as the sum of processing costs and annualized machine operating costs. Subsequently, we modify the formulation to form cells in order to maximize the routing flexibility of the system.