Pandra Manufacturing Specifies the Quality Characteristic of One of Its

question 136

Essay

Pandra 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 $125.00 per unit. The customer service manager is of the opinion that the product is likely to fail during the warranty period when the quality characteristic differs from the target by more than 0.020 in either direction.

Required:
To gain a better understanding of the impact of quality variation, you, the product manager, would like to know the following values in a Taguchi Quality Loss Function (QLF), L(x):

1. Cost coefficient, k (rounded to the nearest dollar).
2. Estimated loss, L(x), when the quality characteristic, x, is 0.505. (Round your answer to four decimal places.)
3. Estimated loss, L(x), when the actual quality characteristic, x, is 0.510. (Round your answer to two decimal places.)
4. The amount of change in the estimated loss (or total quality cost) when the deviation from the quality characteristic doubled. What general principle regarding Taguchi Quality Loss Functions is revealed by this example?

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Definitions:

Competitive Prices

Pricing strategy that involves setting prices at the same level or slightly lower than competitors to attract customers.

Cost Differentiation Strategy

A business strategy aiming to offer products or services differentiable from competitors' based on features, quality, or service rather than competing primarily on price.

Product Differentiation Strategy

A business approach aimed at distinguishing a product or service from others in the market to attract a specific customer segment.

Inventory Turnover Ratio

Inventory turnover ratio is a financial metric that measures how many times a company's inventory is sold and replaced over a specific period, indicating efficiency in inventory management.