Pandra Manufacturing Specifies the Quality Characteristic of One of Its $\pm$

question 59

Multiple Choice

Pandra Manufacturing specifies the quality characteristic of one of its popular products to be 0.500" $\pm$ 0.020.An analysis of company records for the last two years suggests that the average cost for warranty repair or replacement is $125 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,by the tolerance of 0.020.Using a Taguchi loss function for this company,what is the amount of the estimated loss when the actual quality characteristic,x,is 0.505?

• A)$0.3906.
• B)$7.8125.
• C)$19.53125.
• D)$125.000.
• E)$1,562.50.

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Definitions:

Sunk-Cost Fallacy

The misconception that ongoing investment in a project should continue based on the cumulative prior investment (sunk costs) regardless of the current and future costs and benefits.

Variety Seeking

The tendency of consumers to seek diversity and change in their choices or experiences.

Cybermediaries

Online intermediaries that facilitate transactions or information flow between businesses and consumers.

Directories

Collections or lists of information categorized for easy reference, often used for finding contact information or services.