Ladder Manufacturing Specifies the Quality Characteristic of One of Its

question 10

Multiple Choice

Ladder Manufacturing specifies the quality characteristic of one of its popular products to be 0.400" ± 0.010. An analysis of company records for the last two years suggests that the average cost for warranty repair or replacement is $100.00 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 0.400, by the tolerance of 0.010.

What is the amount of the estimated loss, L(x) , using a Taguchi Quality Loss Function (QLF) , when the actual quality characteristic, x, is 0.405? (Round final answer to nearest dollar.)

• A) $25.
• B) $5,000.
• C) $10,000.
• D) $400,000.
• E) $405,000.

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Definitions:

GDP

Gross Domestic Product; the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period.

Total Government Spending

The sum of all expenditures made by the government in a specified period, including spending on goods and services, public projects, and social assistance programs.

Economy's Total Output

The total value of all goods and services produced within an economy over a specific period, often measured as Gross Domestic Product (GDP).

Government Purchases

Expenditures by government entities for goods and services that are directly consumed or used in providing public services.