In this study we develop optimization, decomposition, and heuristic procedures to design a unidirectional loop flow pattern along with the pickup and delivery station locations for unit load automated material handling vehicles. The layout of the facility is fixed, the edges on the boundary of the manufacturing cells are candidates to form the unidirectional loop flow path, and a set of nodes located at an intermediate point on each edge are candidates for pickup and delivery stations of the cell formed by those edges. The objective is to minimize the total loaded and empty vehicle trip distances. The empty vehicle dispatching policy underlying the model is the shortest trip distance first. A binary integer programming model describes the problem of determining the flow path and locations of the pickup and delivery stations in which we then provide a decomposition procedure based on a loop enumeration strategy coupled with a streamlined integer linear programming model. It is shown that only a small proportion of all loops have to be enumerated to reach an optimum. Therefore a truncated version of this algorithm should yield a good heuristic. Finally we propose a neighbourhood search heuristic method and report on its performance.