Fix Manufacturing specifies the quality characteristic of one of its popular products to be 0.500" ± 0.020. An analysis of company records for the last two years suggests that the average cost for warranty repair or replacement is $127 per unit. The customer service manager believes that the product is likely to fail during the warranty period when the quality characteristic exceeds on either side of the target of 0.500 the tolerance of 0.020. What is the amount of the estimated loss (to three decimal places) using a Taguchi quality loss function (QLF) if the actual quality characteristic, x, is 0.510? A. $7.938 B. $31.750 C. $79.375 D. $3,175.000 E. $7,937.500
Fix Manufacturing specifies the quality characteristic of one of its popular products to be 0.500" ± 0.020. An analysis of company records for the last two years suggests that the average cost for warranty repair or replacement is $127 per unit. The customer service manager believes that the product is likely to fail during the warranty period when the quality characteristic exceeds on either side of the target of 0.500 the tolerance of 0.020. What is the amount of the estimated loss (to three decimal places) using a Taguchi quality loss function (QLF) if the actual quality characteristic, x, is 0.510? A. $7.938 B. $31.750 C. $79.375 D. $3,175.000 E. $7,937.500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Fix Manufacturing specifies the quality characteristic of one of its popular products to be 0.500" ± 0.020. An analysis of company records for the last two years suggests that the average
cost for warranty repair or replacement is $127 per unit. The customer service manager believes that the product is likely to fail during the warranty period when the quality characteristic
exceeds on either side of the target of 0.500 the tolerance of 0.020.
What is the amount of the estimated loss (to three decimal places) using a Taguchi quality loss function (QLF) if the actual quality characteristic, x, is 0.510?
A. $7.938
B. $31.750
C. $79.375
D. $3,175.000
E. $7,937.500
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