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In this paper, we address a Petri net decomposition approach for simultaneous dispatching and conflict-free routing for bidirectional automated guided vehicle (AGV) systems in dynamic environments. To solve the dynamic problem, static problems for finding near-optimal dispatching and conflict-free routing are solved each time when transportation requests are given. The static problem is converted to an optimal firing sequence problem for a timed Petri net. A Petri net decomposition approach is applied to solve the problem efficiently. In the algorithm, the entire Petri net is decomposed into task and AGV subnets. The penalty function method is used to derive a solution for all subnets. A deadlock avoidance method is embedded in the proposed methodology to ensure the feasibility and the quality of the solution. Computational results show that the proposed method with a deadlock avoidance algorithm efficiently maximizes the throughput for dynamic situations.