- The total manufacturing cost for a part is determined by its process plan, and the total cost includes both processing and material handling costs. This research examines the cost impact of assuming an arbitrary layout when evaluating alternative process plans for production in a new facility. A designed experiment was developed to explore the impact of this assumption. The experiment includes seven different factors that define a manufacturing scenario. The factors are: material cost, material removal rate, part volume, possible blank types, load/unload time, joining rate, and labor rate. The objective of this research is to determine which of these factors have a large impact on whether the assumption of an arbitrary layout is likely to lead to error in selecting the lowest cost process plan, and to use the results to identify specific manufacturing scenarios where the arbitrary layout assumption is not appropriate. Four factors were determined to be important: part volume, load unload time, material cost, and labor rate. The relative importance of these factors was then evaluated, and some manufacturing scenarios are identified where layout optimization and process plan optimization should be integrated.