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Tolerance assignment plays a vital role in reducing the manufacturing cost, and most optimization models for assigning the tolerances tend to ignore the process capability of the machine. Therefore, the quality loss due to nonconforming parts can be unacceptably high. Proposes a non‐linear mathematical programming model for determining the component tolerances by simultaneously formulating the component’s manufacturing cost, the machine’s process capability and scrap rate. Includes a comparison between the results obtained by the proposed model and the traditional method.

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