Question

this is really more of an engineering economics question. thanks for whoever can help. will upvote help

37. A part dimension on a power tool is specified as 32.25+0.25 mm. Company records show an average dimension after manufacture of 32.25 ± 0.1 mim. If the units are defective, they are replaced at a cost of $15.00 per unit. The current volume is 25,000 units per month. An improvement is being considered for the forge die that will cut the variation by a third, but is costs $275,000. Determine the Taguchi loss function and the payback period for the investment.

Answer 1

TAGUCHI LOSS FUNCTION IS STATISTICAL METHOD, WHICH SHOWS HOW MANUFACTURE OF EACH NON PERFECT PARTS RESULTS IN A LOSS FOE THE COMPANY. THIS CONCEPT S A LANDMARK IN DESCRIBING QUALITY AND HAS HELPED SPREAD THE CONCEPT OF CONTINUOUS IMPROVEMENT. THIS CONCEPT EXPLAINS THAT QUALITY DOES NOT SUDDENLY PLUMMET AND PRIVATE AND SOCIAL COSTS DO NOT RISE SUDDENLY WHEN PRODUCT ARE NOT IN CONFORMANCE TO SPECIFICATIONS

THE TAGUCHI LOSS FUNCTION FOR ONE PIECE OF PRODUCT IS :

LOSS IN DOLLARS = CONSTANT *(QUALITY CHARACTERISTIC - TARGET VALUE)^2

= 275000*(15-375000)^2

= 275000*(-374985)^2

= 275000*140613750225

= 3.8668781311875e+16