In a highly volatile manufacturing environment, classical job shops and other manufacturing systems do not meet the desired timeline and production quantity. From other traditional layout performance studies, we can derive that a superior layout design is essential. One such design is the Distributed layout. It is the latest drift in facility layout design research due to its superior performance in reducing material handling cost when compared with other types of layout design. We also discover that most of the research work carried out so far is on a deterministic test bed. In this research work, the stochastic environment is introduced to layout performance evaluation for both distributed layout and process layout. The selected performance measures are material handling cost, work-in process and cycle time. In general, material handling costs are the product of loaded travel time and usage cost (in dollars) per hour, which does not represent the true cost incurred. The empty travel distance, which is a major contribution to the cost calculation, is included in this research. Case studies on different numbers of machines are carried out and evaluated. These case studies are simulated using ARENA in order to study their respective performances under dynamic environments. The results indicate that distributed layout has superior performance in responding to the dynamic environments over process layout in terms of all considered performance measures. Upon the inclusion of machine failures to these case studies, a reverse scenario in the performance of distributed layout is observed, i.e., the process layout performs superior to the distributed layout in the presence of degrading machine availability