The purpose of this research is to develop a method for part-machine grouping subject to production and management constraints. In the proposed integer programming model, minimization of operating and material-handling costs are considered as an objective function. The model allows one to recognize the existing parts and machines into disaggregated cells. New constraints are introduced in the model to resolve unbalancing capacity and bottleneck problems. It is found that this approach could have a better flexibility on cell size design for mote alternatives than conventional methods. Experimental grouping and comparison studies with ROC algorithm are given for evaluation purposes.