To design a reasonable dimensional tolerance of a transmission shaft, the higher product quality while lower manufacturing cost must be considered. This paper provides a mathematical model and a flowchart which elucidates the relationship between process capability index (PCI), reliability, tolerance and manufacturing cost, considering the characteristics of the shaft diameter, the material and manufacturing process. A 10.904% cost reduction under certain PCI range of a real case shows the effectiveness of the model and flowchart, thus it can be applied to those technical area when optimizing product design.