Methanol in crude glycerol from biodiesel production is considered to be a raw material for dimethyl ether production. In this work, the production of dimethyl ether from the dehydration reaction of methanol in a reactive distillation is studied. A model of the reactive distillation is developed using a process simulator and used to analyze its performance by considering both the methanol conversion and the total annual cost. The effect of key operating parameters on conversion of methanol is reported. The optimal process design is determined in terms of the minimization of total annual cost.