Many PMP aspirants, while studying PMBOK come across two terminologies in the Risk Chapter - Tolerance and Threshold. These two words apparently seem to have same meanings and often confuse people.
Here, I will describe Threshold and Tolerance in most simple words and with an example:
Threshold:
My threshold to withstand temperature is: 10'C to 40'C - Below or above 10C and 40C I will not be able to manage.
Tolerance:
Temperature between 10'C and 40'C is tolerable for me.
So, as we saw above, Threshold is limit, below or above, human or a machine or any result will be considered out of control/difficult to manage/out of range. Tolerance is the range that is under control/manageable within the limits (threshold).
As we understood with the example above, Threshold and Tolerance do not have same meanings, and that both are used to describe two different things.