Abstract: This paper proposes an improved methodology for machine tool reliability analysis. The overall objective of the proposed methodology is to provide the machine tool manufacturers with the approach that will help them in making cost driven decisions while improving the performance of their machines in the field. The methodology consists of three parts viz., modified fault tree diagram, simulation based data analysis and cost based Failure Modes and Effects Analysis (FMEA). Modified fault tree diagram found useful in providing better insight into the failures and their impact. The simulation based approach helps in obtaining time to failure distribution parameters for each failure events using expert's judgements. The effect of uncertainty in the experts' judgements is also quantified in terms of 90 per cent confidence interval values of the parameters. Finally, the cost based FMEA proposed in this paper will help the manufacturer in identifying the critical failure events based on actual cost of failures to the users. The methodology is illustrated with the help of an example of a CNC grinding machine
