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Presents an assignment model formulation for the machine cell formation problem in cellular manufacturing based on an appropriate definition of dissimilarlity between any pair of machines for the grouping problem. This dissimilarity measure considers the production volume or demand for the parts on the respective machines and forms the cost parameters for the assignment model which is to be minimized. Identification of the machine cells automatically yields the corresponding part groups which are then assigned to the cells. The model is fast‐converging, taking advantage of the well‐proven assignment algorithm. Also presents an algorithm for dealing with mild cases of exceptional elements and too many machine cells. Uses numerical examples to illustrate the model.

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