This paper presents methods to determine the optimal transfer batch sizes of various part types between two machines so as to minimize the sum of the total relevant costs. Information required includes the expected production requirements, the operations' processing times, the travel times, the inventory carrying costs, and others. The total relevant cost components include material handling, pallet, holding, and machine costs. At the same time, the scheduling is optimized so as to attain a good machine utilization. Mathematical programs are developed to minimize total costs subject to the appropriate constraints. Finally, comparisons to other possible and typical methods of transfer batch sizing are done in order to show the relevance of the new proposed methods.