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A quality characteristic has a manufacturing specification (in cm) of 0.200 ± 0.05. Historical data indicate that if the quality characteristic takes on values larger than 0.25 cm or smaller than 0.15 cm, the product fails and a cost of $75 is incurred. Based on this data, answer the questions below and show all work: a. Determine the Taguchi Loss Function b. Estimate the loss for a quality characteristic of 0.135 cm.
State of nature decision S1 S2 S3 D1 250 750 500 D2 300 -250
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