Gudpert Company manufactures a component for laptop computers. Weight and durabil¬

ity of the component are the two most important quality characteristics for the computer manufacturers. With respect to the weight dimension, the component has a target value of 1,000 grams. Specification limits are 1,000 grams plus or minus 50 grams. Products produced at the lower specification limit of 950 grams lose $100. A sample of 5 units produced the fol¬

lowing weight measures:

During the first quarter, 40,000 units were produced.
Required:
1. Calculate the loss for each unit. Calculate the average loss for the sample of 5.
2. Using the average loss, calculate the hidden quality costs for the first quarter.
3. Durability is another important quality characteristic. The target value is 4,000 hours of operation before failure. The lower specification limit set by engineering and marketing is 3,600 hours. They agreed that there should be no upper specification limit. They also noted that there is a $75 loss at the lower specification limit. Explain why there would be no upper specification limit. Use the lower limit and the left half of the the Taguchi quadratic loss function to estimate the loss for components with the following lives: 3,000 hours, 2,000 hours, and 1,000 hours. What does this reveal about the importance of durability?

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Unit No. Measured Weight 1 1,020 2345 1,035 1,050 920 945