Group scheduling, which is a kind of operations scheduling based on the GT concept is analyzed in a multi-stage manufacturing system. The purpose of this research is to develop and evaluate a heuristic algorithm for determining gro up sequence and job sequence within each group to minimize a complex cost function, i.e. the sum of the total pe-nalty cost for tardiness and the total holding cost for flow time, in a multi-stage manufacturing system with group setup time dependent upon group sequence. A heuristic algorithm for group sc heduling is developed, and a numerical example is illustrated. For the evaluation of the pro-posed heuristic algorithm, the heuristic solution of each of 63 problems is compared with that of random scheduling. The result shows that the proposed heuristic algorithm provides better solution in light of the proposed cost function.