In general, thermal processes can be classified into two categories: heat-work conversion processes and heat transfer processes. Correspondingly, the optimization of thermal processes has to have two different criteria: the well known entropy generation minimization method and the recently proposed entransy dissipation maximization method. This study analyzes the thermal issues in a heat exchanger group, and optimizes the unit arrangements under different constraints based on a suitable optimization criterion. The result indicates that the principle of minimum entropy generation rate is valid for optimizing heat exchangers in a thermodynamic cycle with given boundary temperatures. In contrast, the entransy dissipation maximization is more suitable in heat exchanger optimizations involving only heat transfer processes. Furthermore, the entropy generation rate induced by dumping used streams into ambient surroundings has to be taken into account, except for that originating from the hot and cold-ends of heat exchangers, when using the entropy generation minimization to optimize heat exchangers undergoing a thermodynamic cycle. Heat exchangers, one of the most important devices in thermal engineering, are being used in more than 80% of energy utilization systems. Improving their effectiveness has often been regarded as the key issue in energy conservation. Consequentially, thermal engineers have developed a large number of passive and active technologies to enhance thermal performance by adding extended or rough surfaces and various inserts to enlarge the exchange surfaces or by introducing surfaces or fluid vibrations and external electric or magnetic field to expedite the process [1][2][3]. Although all of these ideas have been more or less successful in reducing energy consumption, the fundamental physics involved is still not clear. One issue is the relationship between heat exchanger effectiveness and heat *Corresponding author (email: chenqun@tsinghua.edu.cn) transfer irreversibility, noting that heat transfer is an irreversible process [4]. The crucial problem is in understanding why heat exchangers with different flow arrangements lead to diverse heat transfer performances under the same given conditions. Using the entropy generation as a measure of irreversibility for any irreversible process, Bejan [5,6] introduced the concept of irreversibility as being due to finite temperature difference as well as fluid friction in heat transfer processes and optimized the regenerative heat exchanger for a Brayton cycle heat engine based on the criterion of minimum entropy generation. Thereafter several researchers, e.g. Poulikakos [7]