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A new linear point design technique is presented for the determination of tuning parameters that enable the optimal estimation of unmeasured engine outputs such as thrust. The engine's performance is affected by its level of degradation, generally described in terms of unmeasurable health parameters related to each major engine component. Accurate thrust reconstruction depends upon knowledge of these health parameters, but there are usually too few sensors to be able to estimate their values. In this new technique, a set of tuning parameters is determined which accounts for degradation by representing the overall effect of the larger set of health parameters as closely as possible in a least squares sense. The technique takes advantage of the properties of the singular value decomposition of a matrix to generate a tuning parameter vector of low enough dimension that it can be estimated by a Kalman filter. A concise design procedure to generate a tuning vector that specifically takes into account the variables of interest is presented. An example demonstrates the tuning parameters' ability to facilitate matching of both measured and unmeasured engine outputs, as well as state variables. Additional properties of the formulation are shown to lend themselves well to diagnostics.