Recent studies have questioned the predominance of cellular layouts over functional layout largely because the design of layouts for cellular manufacturing system (CMS) has not received the researchers'attention as much as cell formation in cellular manufacturing. In this article, a mathematical model formulated as quadratic assignment problem for the design of layouts (intra-cell as well as inter-cell) for cellular manufacturing systems is proposed with an objective that minimizes the material handling cost and maximizes the closeness rating. A multicriteria heuristic algorithm is developed to solve the problem. An attempt has been made to make the model practical by considering the production volume, transfer batch size and operation sequence of parts. The model is also capable of evaluating cellular layouts vis-a-vis functional layouts. The results are validated by using simulation model.