Handling and locating pallet system is one of the most important subsystems in a flexible production plant. The impact of pallet systems parameters on process and energy efficiency of production plants has been verified and examined by a number of studies in the literature. In this paper, introducing novel design constraints for pallets and buffers, a new optimization algorithm under linear constraint models is developed. It generates the precise optimal values for the most challenging variables in a decoupled multiple-loop pallet system. The design variables are number of pallets, conveyor velocity, scheduling of parts, and buffer capacities. In a case study, the optimization algorithm is compared with a more detailed simulation model. The differences between the solutions are minor, although the optimization algorithm only uses partial information, and the computation time is much lower compared to the simulation approach.