The paper identifies the various issues in query processing and optimization while choosing the best database plan. It is unlike preceding query optimization techniques that uses only a single approach for identifying best query plan by extracting data from database. Our approach takes into account various phases of query processing and optimization, heuristic estimation techniques and cost function for identifying the best execution plan. A review report on various phases of query processing, goals of optimizer, various rules for heuristic optimization and cost components involved are presented in this paper.