Tolerance analysis and synthesis plays a vital role in the success of a product design because it directly affects product quality and manufacturing cost. It also affects manufacturing process selection and planning. This research provides a review of several commonly used assembly tolerance analysis models and evaluation of their limitations. A new assembly tolerance analysis model is proposed based on process capability indices, mean shifts and tolerance specifications which can be used to bridge the gap between design and manufacturing. A computer tolerance analysis system that integrates the proposed tolerance analysis model as well as several other assembly tolerance analysis models with a parametric CAD package and a manufacturing process database is described. This system can aid the user to perform tolerance analysis and design concurrently with CAD modeling, and discover potential manufacturing and assembly problems at the design stage. The integration of various modules of the system involves dynamic data exchange(DDE) and object linking and embedding(OLE) under Windows environment. The system allows determination of tolerances on critical assembly dimensions and updating of CAD drawing. Furthermore, allocation of part dimension tolerances may be performed by making use of the data on various manufacturing process capabilities. Examples are presented to explain the use of the developed model and the tolerance analysis system.