Product tolerance is one of the important factors which affect the quality and cost of product. However, influenced by many complicated factors, there are still many problems which need to be resolved compared with other research works in CAD field. How to determine tolerances of product effectively is still a big problem. Based on exponent model of tolerance-cost, the relationships between tolerance and other characteristics influencing processing cost are studied in this paper. A relational model of tolerance-cost is come up with based on the above relationships. And then, internal relation between tolerance and lifetime is discussed. Meanwhile, along with the lifetime converted into the cost, the compensated relational model of tolerance-lifetime is presented. Finally, the method on the decision of tolerance grade is analyzed. This paper realizes the organic combination of tolerance, lifetime and cost, and effectively decides how to generate tolerance grades.