Now a days the developing countries and industries are restricted by the shortage of energy. The energy demand rose about 25% during the last 10 years and it will rise 44% over the coming 20 years (Müller et al. 2009), especially for the developing countries such as India, China and Russia. In addition, energy price is also a significant factor for the industrial sector which varies very often. now a day. Because of the energy shortage and energy price rise, effcient use of energy becomes a worldwide hot spot problem. It is not only a problem about cost reduction, but also a great contribute to the environmental protection. However, the energy efficiency was always ignored in the past decades. In order to gain more benefit and become more competitive in the market, energy efficiency should be considered as an essential factor in the layout planning phase.
Every industry needs to organise their physical goods within their available space so as to achieve certain objective. In manufacturing industry during layout planning, each of their departments to be placed in the two dimensional shop floor region so as to minimize the material handling cost. This is called as Facility Layout Problem (FLP). Layout planning has two phases namely block layout design and detail layout design. The block layout phase specifies the relative location and size of each department. Based on the block layout output, the detailed layout phase decides exact department locations, aisle structures, input/output (I/O) point locations, and the layout within each department. The final layout need to satisfy the objectives such as total material handling cost, total closeness score and space demand. To produce a energy efficient and environmental friendly layout for industries, the energy loss criteria is also considered in addition to the traditional objective called total material handling cost. In this project, a mathematical model along with the solving methodology will be designed and developed indigenously.