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Question: Your company uses the traditional Taguchi Quality Loss Function to estimate quality costs. You have been asked to take a sample of three items to determine the average quality cost per item. The target diameter of the item is 12.25 inches and it has a tolerance of 0.15 inches. Any item that is out of the specification limits must be scrapped for $2.
A. What is Taguchi's Quality Loss Function for the item?
B. Consider a sample of three items with diameters (in inches): 12.15, 12.35, and 11.05. What is the average quality cost per item in the sample?
C. Now your company is considering using an "Absolute" Taguchi Quality loss function instead of the traditional "quadratic" Taguchi quality loss function. Re-estimate the average quality cost per item in the sample using the absolute taguchi quality loss function.
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