An Electronic Component in a Computer Has an Output Voltage

question 79

Essay

An electronic component in a computer has an output voltage specification of 100 ±1.0 millivolts. The loss to the firm for a component that is outside of the specifications is $750. The output voltage for a sample unit is 101 millivolts.
Required:
1. Calculate (to the nearest dollar) the value of k, the cost coefficient in the Taguchi Quality Loss Function (QLF).
2. Calculate (to the nearest dollar) the estimated quality loss, L(x), for x =101.

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Definitions:

Diagonal Line

A straight line connecting two nonadjacent corners of a figure, such as a square or rectangle, or a line segment that runs across a geometric figure.

First Welfare Theorem

An economic principle stating that under certain conditions, competitive markets (with no externalities) will lead to a Pareto efficient allocation of resources.

Pure Exchange Economy

An economic model where all agents are consumers, and the only economic activities are the consumption and exchange of goods, with no production.

Numeraire

A standard unit of account in which prices and values are expressed; it serves as a measure for comparing the worth of goods or services.