This paper considers an infinite-capacity M/M/c queueing system with modified Bernoulli vacation under a single vacation policy. At each service completion of a server, the server may go for a vacation or may continue to serve the next customer, if any in the queue. The system is analyzed as a quasi-birth-and-death (QBD) process and the necessary and sufficient condition of system equilibrium is obtained. The explicit closed-form of the rate matrix is derived and the useful formula for computing stationary probabilities is developed by using matrix analytic approach. System performance measures are explicitly developed in terms of computable forms. A cost model is derived to determine the optimal values of the number of servers, service rate and vacation rate simultaneously at the minimum total expected cost per unit time. Illustrative numerical examples demonstrate the optimization approach as well as the effect of various parameters on system performance measures.