This paper focuses on the simulation studies conducted to evaluate the performance of a flexible manufacturing system (FMS) operating under two different scenarios: part movement policy and tool movement policy. A typical configuration of FMS is considered for the purpose of experimentation. A discrete-event simulation model of the FMS is developed for each of the two scenarios. A number of scheduling rules are incorporated in the simulation model for part scheduling decision. The performance measures considered are mean flow time, mean tardiness, percentage of tardy parts and mean utilization of machines. The simulation results are subjected to statistical analysis. For the FMS considered in the present study, tool movement policy is found to perform significantly better when compared with the part movement policy.