The activity of tolerance allocation and optimization is a critical step in the product design process. This inherent trade-off between design objectives and process capability poses challenges in achieving right tolerances, both technically and effort-wise. Traditional methods in tolerance allocation are mostly regressive and are constrained by selection of the manufacturing processes. A progressive approach to tolerance allocation that does not assume these processes helps in achieving optimality of the tolerances and selection of manufacturing processes to realize the design. The two-stage process suggested in this paper formulates an optimization problem that allocates the tolerances based on sensitivities of tolerance values at the first stage followed by manufacturing process selection and further optimization to adhere to the processes selected in the second stage. The approach aims at achieving optimal allocation of tolerances and assignment of the manufacturing processes, while keeping the optimization problem computationally simple, although iterative.

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