Ioannou, GeorgeThis dissertation addresses for the first time the integrated problem of designing the manufacturing shop layout concurrently with its material handling system. Specifically, this study provides a method to derive shop designs that are economic to set up and efficient to operate. In doing so, it considers the following highly interrelated issues: i) The topology of the material flow network, ii) the transporter fleet size and routing, and iii) the layout of the resource groups on the shop floor. The design problem is modeled by a comprehensive mathematical program which captures critical practical concerns such as investment and operational costs, traffic congestion, and transporter capacities. The model is decomposed into three NP- hard subproblems by fixing and/or aggregating variables and constraints. The first subproblem is the generic multi-commodity fixed charge capacitated network design, for which an improved lower bound is derived based on a dual ascent method. This problem is solved by three heuristics that provide near-optimal network designs. The second subproblem concerns the transporter routing, which is a special case of the distance-constrained vehicle routing problem. For the transporter routing problem near-optimal solutions are derived in polynomial time by two efficient heuristics with bounded worst-case performance. Tight lower bounds are provided by solutions to the assignment problem. An integrated method combines the most effective heuristics for the material handling system design subproblems with a simulated annealing scheme to solve the global shop design problem. Our novel approach addresses simultaneously most major decisions involved in manufacturing shop design, and provides globally near optimal solutions. The method is applied to the redesign of the shop of a large manufacturer, and generates a particularly attractive production system design reducing significantly both investment and operational costs, while providing for smooth system operation.en-USalgorithmscomputational complexitygraph theoryoptimizationautomationmanufacturingplant layoutmanufacturing systemsSystems Integration MethodologyDissertation