We compare the effectiveness and efficiency of alternative operational dispatching policies that are integrated into the design phase of a circular material handling network for automated material handling vehicles. Exact formulations describe the problem of optimal concurrent design of the unidirectional loop track layout along with the locations of the pickup and drop-off stations. The objective is to minimize the total loaded and empty vehicle trip distances, which is a surrogate for vehicle fleet size. Since first-encounter-first-served cannot be modeled on a loop and station locations which are not yet designed, we approach first-encounter-first-served optimal design through shortest-trip-distance-first. Managerial observations in support of shortest-trip-distance-first are reported. The findings of the optimization models in the design phase are well supported by the outcomes of the simulation model in the operation phase. We conclude that one should apply shortest-trip-distance-first dispatching when designing the loop and stations, and then follow first-encountered-first-served in operating the fleet of the vehicles.