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How do I calculate the Optical Power Budget?

[Description]
Is term used to describe total amount of light energy amplitude available over a certain link path. The budget can be determined by subtracting the Receiver Sensitivity from the Optical Output Power. The optical budget serves as a useful estimation to determine if sufficient optical output power remains on the receiver side of an optical link. The optical power budget also refers to the allocation of available optical power (transmitted into a given fiber by a given source) among various loss-producing mechanisms.
The loss is caused by various factors. Typical losses are caused by fiber attenuation (per km), slice attenuation (per slice), and connector attenuation (per connector pair).
 
[Suggestions]
1. Power Budget = (Output / Launch Power) - (Receiver Sensitivity)
2. Worse case Optical Power Budget = (Min TX power) - (Max RX sensitivity) - (LED aging factor) - (insertion loss)

We'll use the following values to illustrate:
Min Tx Power = -9.5 dBm
Max Rx Sensitivity = -20 dBm
Estimated LED aging = 1 dB
Estimated Insertion loss = 1 dB