A margin based approach to determining sample sizes via tolerance bounds.

This paper proposes a tolerance bound approach for determining sample sizes. With this new methodology we begin to think of sample size in the context of uncertainty exceeding margin. As the sample size decreases the uncertainty in the estimate of margin increases. This can be problematic when the margin is small and only a few units are available for testing. In this case there may be a true underlying positive margin to requirements but the uncertainty may be too large to conclude we have sufficient margin to those requirements with a high level of statistical confidence. Therefore, we provide a methodology for choosing a sample size large enough such that an estimated QMU uncertainty based on the tolerance bound approach will be smaller than the estimated margin (assuming there is positive margin). This ensures that the estimated tolerance bound will be within performance requirements and the tolerance ratio will be greater than one, supporting a conclusion that we have sufficient margin to the performance requirements. In addition, this paper explores the relationship between margin, uncertainty, and sample size and provides an approach and recommendations for quantifying risk when sample sizes are limited