The paper presents a model for assessing costeffectiveness of facility layout alternatives. The model is afive-phase procedure including evaluating current layoutin phase 1. In phase 2, feasible layout alternatives aregenerated. Phase 3 and phase 4 provide evaluation basedon tangible and intangible factors. Phase 5 prefers a layoutalternative based on multiple criteria decision makingtools. Economical and working environmental aspects areconsidered in the evaluation process utilizing tools such asLife Cycle Cost Analyses (LCCA) and Multi CriteriaDecision Making (MCDM). Factors reflecting life-cycleconsideration include development, investment, usage,and scrapping. Non-economic evaluation elements arealso considered in the MCDM. To test the proposedmodel, a case study is performed at the Swedish MailTerminal in the town of Alvesta, a part of Posten SwedenAB. The terminal has several space, machine, andoperational constraints. The three layout alternativesinvestigated are suggested by the authors, by the branchmanagement, and by the Posten Sweden AB managementpersonal. Result obtained from the study show that thelayout alternative with the most implementation costyields a nine percent better total LCC than the closestalternative based on ten years life cycle length. The paperprovides a generalized layout evaluation procedure formanufacturing companies. Further research is required tocustomize the proposed procedure for evaluatingalternative service facilities.