Abstract
To achieve high productivity in today's plants and warehouses, an efficient, orderly, and flexible flow of materials is essential. It is increasingly being realized that material handling and warehousing activities cannot be separated from plant layout and design activities. The interface between plant layout, material handling, and warehousing systems represents a crucial step toward an integrated and systematic facilities design. The manufacturing entities who design for the total operating system by a well-defined set of objectives and constraints tend to increase their chance of improving or increasing throughput, space utilization, operating flexibility, employee morale/working conditions, and overall productivity. These also tend to reduce capital expenditure and operating costs. Once an integrated facilities system is envisioned and contemplated, the emphasis shifts to models and optimizing the system. Quick and Dirty Methods, Simulation Methods, and Clustering Analysis Methods have been proposed as viable options for modelling and optimization. A detailed procedure for analysis and application of Cluster Identification (CI) Algorithm is presented. At the conclusion, advantages and practical implications of CI algorithm is presented and analysed and a comparison with simulation models is provided.

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