Scope and Purlmse---An effective tool management is a major requirement for the implementation of a flexible manufacturing system (FMS), hence the computer numerical control (CNC) machine tools. A new solution methodology to the tool management problem is proposed in connection with the tool magazine arrangement and operations sequencing decisions, where there can be alternative tools for each operation. The proposed approach not only improves the overall solution in terms of the total manufacturing cost, but also prevents any infeasibility that might occur at the system level due to tool management constraints through a feedback mechanism.Abstract--A two-phase approach is developed to solve the tool magazine arrangement and operations sequencing problems. The overall aim is to minimize the total manufacturing cost by utilizing the benefits of tool sharing concept and loading duplicate tools due to a possible decrease in tooling and tool operating costs while maintaining the feasibility in terms of precedence, tool magazine capacity, tool life covering and tool availability constraints due to tool contention among the operations for a limited number of tool types, because the absence of such crucial constraints may lead to infeasible results. Furthermore, the proposed approach can provide an effective decision making tool for the short term operational decisions of FMS.