Managing for Quality and Performance Excellence 9th Edition by James Evans,William Lindsay

Exercise 53

In the production of Raphael Transformers, any output voltage that exceeds 120 ± 10 volts is unacceptable to the customer. Exceeding these limits results in an estimated loss of $200. However, the manufacturer can repair a defective unit by changing a resistor that costs $2.25.
a. Determine the Taguchi loss function.
b. Suppose the nominal specification is 120 volts. At what tolerance should the transformer be manufactured?