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It is well understood that the consumption of lube oil should be reduced to minimum due to stringent emission norms and the need to reduce visual smoke. We have used statistical methods for optimising engine performance parameters due to limited time availability for product development. In this paper, techniques that have been used to develop and optimise a small 4-stroke gasoline engine have been described. This work is focussed mainly on oil consumption due to piston assembly and cylinder block. The piston ring assembly has been modeled using simulation software (RINGPAK). Design of Experiments (DoE) tools have been used to optimise the variables / critical factors. The significant factors were identified through ANOVA (Analysis of Variance) table on the above responses. A test procedure has been judiciously finalised to evaluate the optimised parameters. The best combination of factors/levels was arrived at by using the above results and was evaluated through test rig trials.