Simulation is a widely used approach for assisting design and improvement of manufacturing systems. It is a complex activity and needs a great deal of human expertise. Since the knowledge of analyzing simulation output for decision making is not inherently captured in the simulation modeling methodology, a framework that integrates simulation and knowledge-based decision analysis is needed. In this paper, we develop a knowledge-based system that cooperates with simulation for improving the performance of manufacturing cells. Using Axiomatic Design as a guideline, a hierarchical knowledge base structure that corresponds to the decision process is built. Our proposed knowledge-based system consists of a set of facts and three levels of rules in a hierarchy that is consistent with the manufacturing cell system configuration. The system demonstrates the effectiveness of utilizing Axiomatic Design concept when developing a knowledge-based system. The results of an industrial study show that our method contributes to improving the performance of manufacturing cells.