A mathematical model of the machining operation is developed from experimental cutting data. The model considers two aspects of the machining process: tool wear and surface finish. The tool wear model includes the variability inherent in the tool wear mechanism and represents the wear as a tool wear profile rather than a single measure of wear. The surface finish on the machined surface is determined to be functionally related to tool wear and also contains variability. The model is used with Monte Carlo simulation to study the machining economics problem. The economics problem is first defined as a speed-only problem and the effect of tool wear variability is investigated. The speed and feed problem is also studied with surface finish constraints imposed on the optimization procedure.