Pandra Manufacturing Specifies the Quality Characteristic of One of Its

question 50

Multiple Choice

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 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 cost coefficient, k, in the Taguchi loss function (QLF) for this company, rounded to the nearest dollar?

• A) $125.
• B) $6,250.
• C) $15,625.
• D) $312,500.
• E) $781,250.

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Definitions:

Production

The process of combining various inputs to make goods or services for consumption.

Comparative Advantage

The capacity of an individual or country to manufacture a given good or service more efficiently, incurring lower opportunity costs than their counterparts.

Opportunity Cost

The omission of possible gains that could come from different options when one is preferred.

Comparative Advantage

The competence of an individual, firm, or nation to forge a good or render a service with a lower forfeited opportunity compared to others in the market.