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

question 94

Multiple Choice

Ladder Manufacturing specifies the quality characteristic of one of its popular products to be 0.400" $\pm$ 0.010.An analysis of company records for the last two years suggests that the average cost for warranty repair or replacement is $100 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 loss function,if the actual quality characteristic,x,is 0.41?

• A)$25.
• B)$100.
• C)$10,000.
• D)$4,000,000.
• E)$4,100,000.

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Definitions:

Risk Averse

A descriptive term for investors or individuals who prefer lower risk or uncertainties, often choosing investments with smaller potential returns to avoid losing money.

Retirement Savings Plan

A retirement savings plan is a financial arrangement designed to replace employment income upon retirement, which can include various types of accounts like 401(k)s and IRAs.

Tax-exempt Saving

An investment account or product that offers tax benefits, such as no taxation on the interest or profits earned.

529 Plan

A tax-advantaged savings plan designed to encourage saving for future education costs, including tuition, fees, and room and board.