The facility layout design and Cell Formation (CF) problems are the important sectors in designing a cellular manufacturing system (CMS). These problems are interrelated and simultaneous consideration of them is essential for a successful design of CMS. In this paper, a new non-linear mixed integer programming model is presented to solve the integrated cell formation and inter/intra cell layouts in continuous space. The proposed approach incorporated machine reliability with a stochastic time between failures. Some important factors such as stochastic process time, part demand, cell size, variable process routing, and both inter-cell and intra-cell layout are considered in proposed model. The objective is to minimize the total inter/intra cell transportation cost and total breakdown cost. The proposed model is then linearized to reduce computation time and an exact solver by using GAMS is proposed to tackle the computational complexity of the developed model. Results indicate the efficiency and the application of proposed model in the area of CMS conceptually.
