A Tailor Decides to Use Taguchi's Quality Loss Function to Analyze

Essay

A tailor decides to use Taguchi's quality loss function to analyze his shirt making process. Knowing it to be parabolic in shape and of the form L(y)= k(y - t)² where t is the target, y is the actual measurement, and k is the process constant, the tailor decides to use a recent customer order to calculate his process parameters. He takes the custom shirt and measures the collar, which was requested to have a 17.5" collar but actually has a 17.75" collar. The customer notices the difference and demands a 50% reduction in the price of the shirt, which cost the tailor $45 to make. Instead of selling the shirt for $175, the tailor will reduce his price to $87.50. What is the tailor's process constant for a silk shirt?