This paper describes the use of a cost model to aid a design team in selecting a configuration of parts and machines for manufacturing cells. Given a set of proposed solutions ranging from a pure job shop to a pure cellular configuration, the total cost of each solution is evaluated. This calculation includes machine investment, machine setup, and material move costs. The model is illustrated with a simple example. In addition to the cost model, other pertinent factors which are not included in the model are discussed and used to aid in the final cell configuration decision. Finally, the work is illustrated with an actual data set from a local manufacturer that recently implemented manufacturing cells. © 1998 Published by Elsevier Science Ltd. All rights reserved.