pulse oxmetry is based on:
Beers law
Dopplers law
Lambert's law
Poilles law
The principle of pulse oximetry is based on Beer-Lambert law, which states that the concentration of an absorbing substance in solution can be determined from the intensity of Light transmitted through that solution.
In other words, arterial oxygen saturation is based on the differential absorption of red and infrared photons by oxyhemoglobin and deoxy-haemoglobin measured by the pulse oximeter.
This law is a combination of 2 laws: 

Beers law: The intensity of transmitted light decreases exponentially as the concentration of the substance increases.
Lambert's Law: The intensity of transmitted tight decreases exponentially as the distance travelled through the substance increases.
1&2
2&3
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