The development of Optoelectronic components for communications is converging towards access networks where device cost makes a significant impact on the market acceptance. Thus, the device design engineer needs to input assembly, fabrication and process constraints into the design at an early stage. The present study is part of a Project on Packaging of Optical Components that IME, Singapore has initiated as part of an ongoing Electronics Packaging Research Consortium with industry partnership. In the present study, the coupling of optical radiation from a laser diode to optical fiber is simulated for a fiber optic transmitter component development project. Different optical configurations based on direct coupling, spherical ball lenses, integral lensed fibers and thermally expanded fibers are created within the commercially available transmitter package space. The effect of optical element variables on the placement tolerance is analyzed and will be reported. The effect of alignment tolerances on the optical coupling is analyzed. Simulation results are presented recommending realizable alignment and placement tolerances to develop a low cost short range link distance transmitter.