This paper discusses the development of simultaneous optimization model to
determine component tolerance of assembly product and plant for manufacturing processes by
considering quality tolerance limits, and delivery time constraint to minimize total cost in
collaboration environment of make-to-order manufacturing systems. Total cost of the system
consists of manufacturing costs and quality loss costs as the tolerance function, operational costs
for multi-plant manufacturing collaboration which includes: setup costs, material handling
costs, operating costs of assembly, manual operations costs, and transportation costs.
Formulation of the model developed uses mixed integer non linear programming as a method of
solution search. In the numerical examples presented, the optimization process results an
optimal solution. Optimal solution is not sensitive if the changes in quality tolerance constraint
and delivery time constraint is not large. While the addition of an alternative plant for producing
a component can changes the alternative plant selected.