This paper exploits the interactions between the machine scheduling and the scheduling of the material handling system in an FMS by addressing them simultaneously. The material transfer between machines is done by a number of identical automated guided vehicles (AGVs) which are not allowed to return to the load/unload station after each delivery. This operating policy introduces an additional complexity to the problem because it results in sequence-dependent travel times for the deadheading trips between successive loaded trips of the AGVs. The problem is formulated as a nonlinear mixed integer programming model. Its objective is makespan minimization. The formulation consists of constraint sets of a machine scheduling subproblem and a vehicle scheduling subproblem which interact through a set of time window constraints for the material handling trip starting times. An iterative procedure is developed where, at each iteration, a new machine schedule is generated by a heuristic procedure, the operation completion times obtained from this schedule are used to construct time windows for the trips, and a feasible solution is searched for the second subproblem, which is handled as a sliding time window problem. The procedure is numerically tested on 90 example problems.

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