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One general principle is that, the tighter the tolerances, the more expensive the part is. Good engineering design is a balancing act, determining the "best" design that delivers what is required with the minimum cost, energy, waste, time, safety risk, etc. Often times, it is more difficult to clearly understand what is required than what the tolerances should be. Design factors should include things like: what are the consequences of failure, how long is the object designed to last, who will be using the object (anyone or only someone who has significant training), will it have user servicable parts, will it be sent back to the factory for routine maintance, or will it be thrown away first time it breaks, does the operation need to be robust for temperature changes, dirty environment, vibration, corrosion, humidity, atmospheric pressure, etc. Engineering design is a difficult thing to do well. hope this helps
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