Question

A manufacturer of men and women’s sweaters is having troubles with its supplier of buttons. Each button is supposed to have a diameter of 1.00 cm. While quality losses are difficult to judge, the manufacturer knows that if the button is 0.10 cm too small or too large that it will cause problems with buttoning, and the customer will return the sweater at an average cost of $10. Each sweater has a single button. Historical data indicates that the buttons made from the supplier’s process, on average, have a diameter of 1.04 cm, with a standard deviation of 0.03. According to the Taguchi loss function, what is the expected loss per button? Please type your answer with 1 decimal place.

Answer 1