In today’s manufacturing environment, several industries are accomplishing flexible manufacturing systems (FMS) of group technology in cellular manufacturing to meet the competitive market requirements.CNC machines are widely used in FMS due to their high flexibility in processing. Generation of optimal index positions of cutting tools index position is an important task to overcome then on-machining time of CNC machines and for achievement of optimal plans.The present work proposes an application of particle swarm optimization algorithm, as global search technique for optimal identification index positions of cutting tools to be used on the tool magazines of CNC machines for executing a certain set of manufacturing operations. Minimization of total indexing time is taken as the objective function. So to improve the utilization, there is a need to allocate the positions of cutting tools optimally on the tool magazines.It was found that research gives the maximum output obtained in particle swarm algorithm compared with genetic algorithm. Keywords:Indexing time, automatic tool changer, CNC machine, particle swarm optimization algorithmCite this Article Ganesan V, Sivakumar S, Victorraj M. Design of tool allocation positions on magazines using optimization algorithm. Trends in Machine Design. 2015; 2(2): 20–29p.