A computational design tool which allows for optimal tolerance allocation for mechanical and electrical components is being investigated. The approach is to couple a nontraditional optimization method with a Monte Carlo-based tolerance analysis code. The ability to allocate tolerances in an optimal fashion allows an installed capital base to be utilized in the most productive fashion. Application of the technique has a dramatic impact on reducing manufacturing cost and product cycle times as well as increasing productivity, quality, and customer satisfaction. Current tolerance analysis software used in industry does not provide the ability to allocate tolerances in an optimal fashion. Traditional nonlinear programming methos are not robust enough to solve the complex problem resulting from the consideration of a real component or assembly. The combination of the generic algorithm with a tolerance analysis package offers an attractive alternative which runs efficiently on a parallel or distributed computing network. Consideration is being placed on discrete tolerance limit optimization.