Pharmaceutical manufacturing processes consist of a series of stages (e.g., reaction, workup, isolation) to generate the active pharmaceutical ingredient (API). Outputs at intermediate stages (in-process control) and API need to be controlled within acceptance criteria to assure final drug product quality. In this paper, two methods based on tolerance interval to derive such acceptance criteria will be evaluated. The first method is serial worst case (SWC), an industry risk minimization strategy, wherein input materials and process parameters of a stage are fixed at their worst-case settings to calculate the maximum level expected from the stage. This maximum output then becomes input to the next stage wherein process parameters are again fixed at worst-case setting. The procedure is serially repeated throughout the process until the final stage. The calculated limits using SWC can be artificially high and may not reflect the actual process performance. The second method is the variation transmission (VT) using autoregressive model, wherein variation transmitted up to a stage is estimated by accounting for the recursive structure of the errors at each stage. Computer simulations at varying extent of variation transmission and process stage variability are performed. For the scenarios tested, VT method is demonstrated to better maintain the simulated confidence level and more precisely estimate the true proportion parameter than SWC. Real data examples are also presented that corroborate the findings from the simulation. Overall, VT is recommended for setting acceptance criteria in a multi-staged pharmaceutical manufacturing process.