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Proposes a virtual cellular manufacturing approach to implementing cellular manufacturing systems that combines the set‐up efficiency typically obtained by traditional cellular manufacturing or group technology systems with the flexibility of a job shop. Unlike traditional cellular systems in which the shop is physically designed as a series of cells, cells are formed within a shop utilizing a process layout using scheduling mechanisms. The result is the formation of cells that are temporary and logical (virtual) in nature, allowing them to be more responsive to changes in demand patterns. Simulation runs comparing this approach to production using traditional cellular and job shop approaches indicate that this new approach yields significantly better shop performance over a range of operating conditions.

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