Tolerance synthesis is a major task of product and process design and is in a period of extensive study due both to increased demands for quality products and to increasing automation of machining and assembly. Optimum tolerance design and synthesis ensures good quality product at low cost. The primary goal of this research project is to develop an analytical methodology for concurrent optimization of design and manufacturing tolerance syntheses to enhance product manufacturability, quality and cost effectiveness. Based on a more complete understanding of the relationships between dimensional tolerance and machining cost, process capability and tolerance, mathematical models for these relationships are to be formulated. As its objective function the minimum manufacturing cost, and optimization model for concurrent tolerance syntheses will then be developed based on the above relationships. The project will extend and augment previous research on the development of solution procedures for the tolerance optimization model. In particular, simulated annealing algorithm and discrete optimization techniques will be investigated and implement. This research project will tie together disparate efforts that tend to treat design tolerance synthesis and manufacturing tolerance allocation as separate problems. The goal is to achieve more economical manufacturing through tolerance optimization.