Abstract: In this research, we have developed a new efficient
heuristic algorithm for the dynamic facility layout problem with
budget constraint (DFLPB). This heuristic algorithm combines two
mathematical programming methods such as discrete event
simulation and linear integer programming (IP) to obtain a near
optimum solution. In the proposed algorithm, the non-linear model
of the DFLP has been changed to a pure integer programming (PIP)
model. Then, the optimal solution of the PIP model has been used in
a simulation model that has been designed in a similar manner as the
DFLP for determining the probability of assigning a facility to a
location. After a sufficient number of runs, the simulation model
obtains near optimum solutions. Finally, to verify the performance of
the algorithm, several test problems have been solved. The results
show that the proposed algorithm is more efficient in terms of speed
and accuracy than other heuristic algorithms presented in previous
works found in the literature.