A methodology for the design of operational control aspects of an Automatic Guided Vehicle (AGV) based material handling system is presented. The methodology, which is composed of an integrated model of an AGV based system, was implemented using simulation techniques. The model views a manufacturing function as consisting of machining, queueing, and moving of parts in a shop and that these components of manufacturing must be integrated and coordinated if the production objectives of an enterprise are to be realized. A machining center is modeled as a physical region of a plant and it consists of machines for part processing and capacitated queues in which inbound and outbound parts reside, queueing for machining or handling resources. Automatic guided vehicles provide the transport mechanism required to interface the machining centers. A network approach is employed to represent the layout of the facility, including the location of departments, input and output queues in each department, and the layout of the guidance system on which the AGVs operate. The network approach, along with the coordinate system are employed for modeling the actual translation of vehicles and parts through the shop. The travel time of vehicles and parts between points depends on vehicle speed and the prevailing traffic condition along the path of travel. Several shop control strategies in the application of AGVs have been modeled, implemented, and their effects on shop performance demonstrated. Among these factors are vehicle dispatching, vehicle routing, unit load size selection, job sequencing, shop loading, queue constraints, and capacity constraints due to vehicles and machines. A job in the shop is considered to consist of one or more parts grouped in portable unit load sizes. Therefore, it is unit loads rather than jobs that make the flow transitions. The results of the simulation experiments conducted indicated vital control elements in the design of AGV systems. Through a series of output statistics on system performance, the model provides an easy to use tool to analyze, evaluate, and design of AGV based manufacturing system. / Ph. D.