The damage ratio of Spent Nuclear Fuel (SNF) is a very important intermediate variable for dry storage risk assessment which require an interdisciplinary and comprehensive investigation. It is known that the pinch load applied to the cladding can lead to Mode-3 failure and the cladding becomes more vulnerable to this failure mode with the existence of radial hydrides and other forms of mechanical defects. In this study, a sensitivity analysis was performed to evaluate the importance of the damage parameters that need to be calibrated for the simulation of zircaloy-4 cladding failure using computational mechanics. The simulation model was generated from a microscopic image of the cladding with hydride. The image segmentation method was used to separate the Zircaloy-4, hydride, and hydride- Zircaloy matrix interfaces to create a pixel-based finite element model. The ring compression test (RCT) was simulated because the resistance of the cladding under pinch load can be evaluated by this test. It was assumed that the damage starts with the formation and growth of voids or small cracks in the material, which grow and combine to form larger cracks, eventually leading to the complete fracture of the material. Therefore, the ductile damage criterion was applied to all materials to simulate crack formation and propagation. The sensitivity analysis was performed based on the design of experiments using L8 orthogonal array. The effects of five factors on the fracture resistance of hydrided cladding were quantified, and they are the fracture strains describing the damage initiation in zircaloy-4 matrix, hydride, and hydride-zirconium matrix, and yield stress and Young’s modulus for hydride-zirconium matrix. Information on those parameters are hardly available in literature and experimental data which enable the estimation of those are also very rare. It is planned to build a computational model which can accurately simulate the fracture behavior of hydrided cladding by calibrating significant fracture parameters using reverse engineering. The results of this study will help to figure out those significant parameters.