It is well acknowledged in software engineering that there is a great potential for accomplishing significant productivity improvements through the implementation of a successful software reuse program. On the other hand, such gains are attainable only by instituting detailed action plans at both the organizational and program level. Given this need, the paucity of research papers related to planning, and in particular, optimized planning is surprising. This research, which is aimed at this gap, brings out an application of optimization for the planning of reusable software components (SCs). We present a model that selects a set of SCs that must be built, in order to lower development and adaptation costs. We also provide implications to project management based on simulation, an approach that has been adopted by other cost models in the software engineering literature. Such a prescriptive model does not exist in the literature. © 2002 Elsevier Science B.V. All rights reserved.