Duramold specializes in manufacturing molded plastic panels to be fitted on car doors. The blueprint specification for the thickness of a high-demand model calls for 0.1875 ± 0.0025 inch. It costs $120 to manufacture and $150 to scrap a part that does not meet these specifications. The thickness measure for the unit just completed is 0.1893 inch.

Target quality level (in inches)	0.1875
Specified tolerance (in inches)	0.0025
Costs to manufacture	$120.00
Cost to scrap	$150.00
Labor cost/unit to eliminate thickness variation	$6.00
The thickness measure for the unit completed (inches)	0.1893

Required

1. Use the Taguchi Loss Function, L (x), to determine:

a. The value of the cost coefficient, k

b. The amount of loss for the unit, L (x = 0.1893)

2. Assume that Duramold can eliminate the uneven thickness by adding a production worker, at the critical production point, for $6 per unit. Under this assumption:

a. At what tolerance should the panels be manufactured? Show calculations.

b. What should be the production specification for these panels?