Variance Estimation in Parameter Design

This paper, according to the particularities of paramater design, propose a method of variance estimation in parameter design with conditional distribution and gives formulas of variance estimation for the calculable situations. The technique is illustrated on a calculable situation and compared to Taguchi’s Cross-product method and simulation method. It comes to the conclusion that the analysis results of the method of this paper are more similar to those of simulation method than those of Taguchi’s.