A comprehensive numerical model is introduced in this article for estimating the tool wear based on finite element model and inverse heat conduction techniques considering the interactive and direct effects of the experimental factors of recast layer thickness, anode energy fraction and plasma flushing efficiency. The individual and interactive effects of the major thermo-physical and electro-physical parameters have been modeled to improve the introduced tool wear estimation procedure. Comparison of the numerical results with the experimental observations indicated that the developed finite element model and inverse heat conduction process was capable of predicting the tool wear with high accuracy. Additionally, application of analysis of variance technique showed that the introduced mathematical models for estimating anode energy fraction, plasma flushing efficiency and recast layer thickness are statistically significant and adequate which means that the proposed equations can be used for a variety of physical, electrical and thermal variables’ combinations.