Conceptual Overview: Explore the Taguchi Loss Function.

The graph shows the Taguchi loss function for the speed of cassette tapes in a handheld recording device. The target speed is 1.875 inches per second. Based on past data, the company expects that repair costs under warranty will be $20 if the actual speed is as slow as 1.725 or as fast as 2.025 inches/second. When the graph loads, it shows the design specifications when it costs $5 to have a technician inspect tape speed and readjust it to the target before shipping. Speeds between the two indicaed values would be expected to generate less loss in warranty claims than the $5 it would cost to adjust them to the target speed. So, recorders with speeds outside that range would be adjusted, while those with speeds inside that range would not.

Drag on the graph to change the design specification range and observe the corresponding cost estimate.

1. According to the Taguchi loss function, which of the following is most accurate for the case illustrated?

1. If the technician's costs are reduced to less than $5, the design specification should be more restrictive.
2. The design specifications should be less restrictive if the technician's costs are reduced to less than $5.
3. If the company decides to inspect and readjust only those units with tape speeds less than 1.84 or greater than 1.91, then the most they should pay for the technician is about $1.84 for each unit.
4. In any case, if the technician cost doubles, then the corresponding specification range should double.

2. What is the design specification when the technician cost is approximately $15?

1. (1.825, 1.925)
2. (1.786, 1.964)
3. (1.745, 2.005)
4. (1.834, 1.916)

3. Which of the following is the least accurate?

1. Using the Taguchi Loss model, all units within the specification range will have an estimated loss of zero.
2. Decreasing the specification range will lower the technician cost.
3. Increasing the technician cost will increase the specification range.
4. Wide manufacturing tolerances reduce the manufacturing cost, but allow a higher technician cost.

20 15 Loss ($) $5.00 1.800 11.950 0 1.75 1.80 1.85 1.90 1.95 2.00 Tape Speed (inch/second)