This paper discusses and illustrates how the application of analytical tools, if properly applied, during the design process ensures a design that is both reliable and economic. Emphasis is on the dynamic behavior of centrifugal and reciprocating compressors. Illustrations deal with both types of compressors. The key requirement is that pulsations, vibration levels and dynamic stresses must be low enough, that there is minimal impact on performance or reliability, while maintaining an economical design. To achieve this result, it is necessary to understand and control forcing functions, natural frequencies, mode shapes and dynamic stiffnesses. These considerations apply to rotor dynamics, piping vibration, torsional vibration, skid and foundation vibration. In addition, similar considerations apply to gas pulsations, where the interaction of the piping geometry with pressure pulsations, (arising from the uneven flow of gas through the suction and discharge nozzles), can produce significant forces and stresses for both reciprocating and centrifugal compressors, as well as degradation of performance. Computer modeling can be used to avoid problems that reduce reliability, degrade performance and increase maintenance. Considerations for determining the appropriate level of analysis are outlined. The probability and cost of events in the absence of suitable design are discussed. The cost of these events is compared to relevant design costs. The practical implications are illustrated with three cases where adequate design modeling and optimization was not done. One case involves a lateral critical and a structural resonance in a centrifugal compressor installation. The second involves a piping failure in a reciprocating compressor installation. The third involves a torsional failure in a reciprocating compressor installation.