Remanufacturing is a practice of growing importance due to increasing environmental awareness and regulations. Facility layout design, as the cornerstone of effective facility planning, is concerned about resource localization for a well-coordinated workflow that leads to lower material handling costs and reduced lead times. However, due to stochastic returns of used products/components and their uncontrollable quality conditions, the remanufacturing process exhibits a high level of uncertainty challenging the facility layout design for remanufacturing. This paper undertakes this problem and presents an optimization method for remanufacturing dynamic facility layout with variable process capacities, unequal processing cells, and intercell material handling. A dynamic multirow layout model is presented for layout optimization and a modified simulated annealing heuristic is proposed toward the determination of optimal layout schemes. The approach is demonstrated through a machine tool remanufacturing system
