A computer chip designed by the MicroKeeb Co. has a specification for the distance between two adjacent pins of 2.000 0.002 mm. The loss due to a defective chip is $4. A sample of 25 chips was drawn from the production process and the statistical results are as follows:

• Average distance between pins = 2.00008 mm
• Standard deviation = 0.00104 mm

1. Compute the value of k in the Taguchi loss function.

(Show your calculations.)

2. What is the expected loss from this process based on the sample data?

(Show your calculations.)