Summary: The central issue in group technology is the cell formation problem, which involves the grouping of parts into families and machines into cells, so that parts with similar manufacturing (and design) attributes are identified and processed by dedicated cells of machines. In the present work, the cell formation problem is modeled as a linear integer programming problem with the objective of minimizing the number of intercellular moves subject to cell-size constraints and taking into account the machine operation sequence of each part. An interesting feature of the proposed formulation is that there is no need of specifying a priori the number of cells to be used, which is automatically adjusted within the solution procedure. A very efficient random search heuristic algorithm, based on the simulated annealing method, is adopted for its solution. The heuristic is tested on a number of problems and its performance is evaluated. Subsequently, a straightforward model is presented to identify the families of parts which are to be processed by the corresponding machine cells.