Analytical cost procedure is developed to determine the quantities of insulation required for a general thermal-fluid system having multiple paths for heat exchange between the system and the environment. One of the most significant parameters obtained from the analysis is the path optimum heat flow partition ratio, which indicates the relative quantity of heat flow permitted along each path in the system to obtain minimum costs. The cost equation is developed in terms of the path energy flow partition ratio and the system irreversibility. The method requires that accurate insulation and energy cost data be obtained prior to the start of calculations. The cost equation, in its general form, allows computation of any other energy partitioning arrangement besides the optimum configuration. The cost method has great generality and can be applied directly to systems having a number of temperature levels either above or below the temperature of the surroundings and differing flow areas along each path. The method is simple and straightforward and calculations may be carried out on a hand calculator.