sembly requirements are satisfied.Ngoi and Ong (1999) presented a complete tolerance charting in the assembly phase.Their method integrates product tolerance design and process tolerance design.The objective is to maximize the summation of weighted process tolerances.Huang and Gao (2002) presented a discrete hierarchy optimal approach for allocating the optimum component tolerance based on estimated process capability.They minimize the total manufacturing cost by using a cost-tolerance function.In process tolerance design, manufacturing engineers develop component process planning to determine manufacturing methods, machine tools, fixtures, cutting tools, cutting conditions, manufacturing routines, and process tolerances.At this stage, BP tolerances are the most important factors.If they are too tight and cannot guarantee the economic fabrication for components by using selected process planning, more precise machine tools, special fixtures, and expensive measurements should be introduced (Wu et al., 1998).This inevitably increases the manufacturing cost of the product.The manufacturing engineers may ask for revision of BP tolerances or of the process plan.In process tolerance design, the most popular methods are also the optimal design for minimum manufacturing cost or maximum process tolerances.Huang et al. (2002) presented an optimal planar tolerance design approach to allocate dimensional and orientation geometric tolerances.A special relevance graph (SRG) was used to represent the relationships between manufactured elements and their size and tolerance information.In addition, the SRG is also applied for the geometric dimensions and tolerances.A linear programming model was established to solve the problem.Huang and Gao (2003) presented a nonlinear programming model for optimal process tolerance balancing.A linear programming model to determine process dimensions and process tolerances was used in Ji (1993) and Ngoi and Teck (1993).Similar methods to determine optimum process tolerances were proposed by Wei and Lee (1995) and Chang et al., (2000).Though the above methods have been used successfully to distribute both component design tolerances and process tolerances in two different phases, they over-emphasize manufacturing factors and seldom consider quality aspects.Systematically, product satisfaction conflicts with manufacturing cost.In other words, a better product satisfaction requires smaller tolerances and a higher manufacturing cost.Taguchi quality loss is a useful monetary specification to evaluate the quality factors (Taguchi et al., 1989;Taguchi, 1993;Jeang, 1998).Therefore the best policy is to consolidate manufacturing cost and quality loss in the same optimization objective to best balance quality satisfaction Manufacturing the Future: Concepts, Technologies & Visions