Material handling system is widely required in various segments of manufacturing and logistics industries. Optimizing the schedule of its vehicles is very important for reducing costs and increasing efficiency. A new Mixed Integer Programming (MIP) model is presented in this paper for scheduling the vehicles of a practical material handling system within a given time window. By selecting the decision variables appropriately, the objective function and the constraints are simplified, and it is formulated as a linear mixed integer problem with reasonable scale. The system dynamics is incorporated analytically within the optimization framework so that the efficient MIP solver CPLEX can be applied to obtain the optimal schedule. Numerical results demonstrate the effectiveness of the new model in comparison with the models and the methods used in industry. © 2012 IEEE.