An engine and an electric machine are operative to communicate tractive power with a transmission device to control output power to an output member. The electric machine is electrically coupled to an energy storage device. A method for controlling the engine and electric machine includes monitoring an operator request for power, monitoring a state of charge of the energy storage device, determining an operating cost for each of a plurality of candidate engine operating points based on the operator request for power and the state of charge of the energy storage device; and operating the engine at the candidate engine operating point having a preferred operating cost.