A Quality Characteristic Has a Specification (In Cm) of 0

question 85

Essay

A quality characteristic has a specification (in cm) of 0.400 ± 0.03. If the value of the quality characteristic exceeds 0.400 by the tolerance of 0.030 on either side, the product will require a $180.00 repair. What is the appropriate Taguchi loss function?

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Definitions:

Private Good

A product or service that is excludable and rival in consumption, meaning its use by one individual prevents its use by another.

Public Good

Refers to commodities or services that provide benefits to all members of society and whose use by one individual does not diminish the availability to others.

Public Good

Goods that once provided to one consumer, can be accessed by others without additional costs, benefiting the entire community.

Free-rider Problem

A situation where individuals consume a good without paying for it, benefiting from the good or service without contributing to its cost.