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Design resolution refers to how interactions or main effects are aliased in an experiment. In a resolution three design, main effects are aliased with two-factor interactions. This means that A is aliased with BC, B is aliased with C, and C is aliased with B. The formula for resolution three design is 2^(3-1), resulting in 4 rounds of experiments. In this design, main effects are not aliased with any two-factor interactions.