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In recent times, we have seen a dramatic increase in the need for prognostics and health management of steam generator (SG) tubes in nuclear power plants. Faster and cheaper implementations of new inspection technologies, including probe designs and signal analysis systems are required. The reliability of these new designs can be assessed by a quantitative probability of detection (POD) study. It is known that there are a number of uncertainties (variabilities or noise), such as system/probe coil construction, inspection procedure, human factors, etc., that can perturb measurements, and thereby affect the accept/reject decision. In contrast to conventional approaches, this paper describes a model based POD evaluation method, to study the effect of single sources of uncertainty on the POD, which in turn can be used to optimize probe/system design and operation. An uncertainty factor with dramatic effect on POD can be identified as a "sensitive" factor in the probe/system design or measurement.