P = 0Q = 2

5) Taguchi Loss Function: A company produces a certain part whose most important dimension is 22.50 (0.020 + (P/1000)) cm. If the tolerance is exceeded, the customer will return the part to the manufacturer at a cost of A$200 + PQ in rework and replacement expenses. A. Determine the constant k in the Taguchi loss function. B. The company can add a finish grinding operation that will allow the tolerance to be reduced to 0.010 + (Q/1000) cm. Using the loss function from part (A) what is the value of the loss associated with this new tolerance? C. The additional operation in the preceding problem will add A$3.00 + (Q/10) to the current cost of the part, which is A$12.50 + (P/3). If the rate of returns from the customer at the tolerance of (0.020 + (P/1000)) cm is (3+ (Q/10) ) %, and it is expected to drop to zero returns using the new tolerance, should the company add the finish grinding operation to the manufacturing sequence for the part?