The Taguchi loss function for a certain component is given by L(x) = 8000(x - N)2, where x = the actual value of a dimension of critical importance and N is its nominal value. Company management has decided that the maximum loss that can be accepted is $10.00.
(a) If the nominal dimension is 30.00 mm, at what value should the tolerance on this dimension be set?
(b) Does the value of the nominal dimension have any effect on the tolerance that should be specified?