Interactive and integrated design and manufacturing can be a useful strategy for designers to reach the efficient design through the cognitive or physical interactions. Process tolerance design is a key tool in the integrated design and manufacturing to reach a product with high quality and low cost. Since the optimal tolerance allocation involves several aspects of the design, manufacturing and quality issues, it is always a time consuming and difficult procedure, especially for complex products. Therefore, to overcome these difficulties, a computer-aided approach for optimal tolerance design of manufacturing process is needed in the design stage. In this paper, a novel interactive framework is introduced for computer-aided multi-objective optimal process tolerance design established upon entropy-based decision making. According to the proposed method, the optimal process tolerances of components are allocated through a multi-objective optimization problem where the process capability function and the overall manufacturing cost should be simultaneously optimized. To model the proper objective functions, the new formulations of process capability and manufacturing cost functions are proposed based on the design and customer’s requirements on the virtual model in CAD software, and the experimental observations, respectively. The non-dominated sorting genetic algorithm II is used for solving the multi-criteria optimization. For automated decision making to find the best process tolerances from the optimal Pareto solutions without objective weighting, an improved entropy-based TOPSIS is used. Based on the obtained optimal process tolerances and specifications, the process planning procedure can be carried out. Finally, to illustrate the capability of the proposed method and to validate it, a windmill transmission assembly as a case study is considered and the computational results are compared and discussed. © 2018 Springer-Verlag France SAS, part of Springer Nature