To analyse an automated guided vehicle (AGV) system operating under selected vehicle routeing strategies, we present a simulation model that can handle an arbitrary system layout as well as arbitrary numbers of AGVs and pedestrians causing congestion in the system. We introduce a dynamic vehicle routeing strategy based on hierarchical simulation that operates as follows: at the time of each AGV routeing decision in the main simulation, subordinate simulations are performed to evaluate a limited set of alternative routes in succession until the current routeing decision can be ® nalized and the main simulation resumed. A case study involving a prototype AGV system operating under the control of a global vision system illustrates the advantages not only of this strategy but also of global-vision-based control.