In this paper, we discuss the development of a two step analytical approach to determine the quantity of material handling equipment (MHE) required for effective handling of products among facilities. In the first step, a preliminary solution is obtained by considering the time required for loading and unloading of products, loaded travelling, empty travelling and breakdown of MHE. A detailed model, which integrates both operational and cost performance factors such as utilisation of MHE, work-in-process at the MHS and life-cycle cost, is then utilised to rank alternatives that are generated from the preliminary solution. The stochastic nature of a manufacturing system, which is not adequately addressed in the literature, is best modelled using queuing theory. An illustrative problem is given, and it is shown that for all the considered problems our approach outperforms the existing methods. The influence of various other factors including the operational characteristics of processing facilities, layout design, maintenance function, MHE speed and batch size in selection of the quantity of MHE is also demonstrated. Thus we show the significance of our proposed approach and its capability to support an integrated decision making process.