Gage tolerance

Represents the discrimination, or increments of measure, that a particular gage has when measuring parts. A practical guideline, known as the Rule of Tens, states that instrument discrimination should divide the process tolerance into ten parts or more.
Gage tolerance < Process tolerance / 10

Your process tolerance is the allowable deviation from a target value that maintains product purpose (process variation). For example, you are producing ball point pens with a ball outer diameter of 0.35mm. Acceptable balls range from 0.34 to 0.36mm. Subtracting the maximum and minimum diameters, the process tolerance is 0.02. In order to accurately measure these balls, you must use a gage capable of detecting several differences in this range. Using the Rule of Tens, calculate 10% of the process tolerance. This means your gage must be able to detect a difference of at least 0.002mm between balls.

In cases where you have a go/no-go gage, and have two specifications, upper and lower, half of the gage tolerance will be for the go gage, and the other half will be for the no-go gage. If the whole tolerance is applied to one or both gages then the total gage tolerance would be 20% of the product tolerance. So the go gage for ball diameter should be 0.001mm and the no-go gage for ball diameter should be 0.001mm. This keeps the resolution of the tool to 10 times better than the tolerance of the product being measured.