Good Practices Engineering Company (GPEC) makes a wide range of machine tools that are used by other companies to manufacture products of its own. When a machine tool fails, it results in significant cost and quality problems. Therefore, GPEC has decided it needs to understand the impact of variation on its customer's product failure costs. GPEC has determined that it costs $2,500 when a product fails in the customer’s hands (represented by (k), the proportionally constant cost of failure). It tests 10 runs of one of its products; the results are given in the table below. The target value for the machined part is 35 centimeters in diameter.

REQUIRED:

a. Compute the total quality loss for GPEC using the Taguchi loss function formula and solution approach given in the text.

b. What would you recommend to GPEC regarding its quality practices? Why?

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Unit Actual Observation 34.5 2 34 33.5 4 36 36.5 6 36 7 35.5 8 35 34.5 34