A novel algorithm for designing the values of the technological parameters for the production of soft magnetic composites (SMCs) was created. These parameters are the hardening temperature T and the compaction pressure p < /em>. These parameters enable us to optimize the power losses and magnetic induction. The advantage of the presented algorithm lies in bi-criteria optimization. The crucial role played by the presented algorithm is scaling, pseudo equation of state and fixed point. On this basis, mathematical models of power losses and magnetic induction were created. The model parameters were calculated on the basis of the power loss characteristics and hysteresis loops. The created optimization system was applied to specimens of Somaloy500. The obtained output consists of a finite set of feasible solutions. To select a unique solution, an additional criterion was formulated.