Optimal design of geodetic network is a basic subject of many engineering projects. An observation plan is a concluding part of the process. Any particular observation within the network has through adjustment a different contribution and impact on values and accuracy characteristics of unknowns. The problem of optimal design can be solved by means of computer simulation. This paper presents a new method of simulation based on sequential estimation of individual observations in a step-by-step manner, by means of the so-called filtering equations. The algorithm aims at satisfying different criteria of accuracy according to various interpretations of the covariance matrix. Apart of them, the optimization criterion is also amount of effort, defined as the minimum number of observations required. A numerical example of a 2-D network is illustrated to view the effectiveness of presented method. The results show decrease of the number of observations by 66% with respect to the not optimized observation plan, which still satisfy the assumed accuracy.