These three problems are based on one business situation. The three-problem series links quality costs, the Taguchi loss function, and statistical process control. AutoSafe, Inc., produces windshields for major international automobile manufacturers. To produce a shatter-proof windshield, a sheet of plastic-like material is sandwiched between two sheets of glass. The completed product must conform to a number of engineering specifications. For example, a completed windshield must not vary significantly from an established target thickness. Products that are too thick or too thin will not fit properly in the vehicle for which they are intended. Quality costs include extra installation time to make a poorly manufactured windshield fit properly; in a worst case scenario, the windshield may leak.

Management is interested in tracking internal failure, external failure, prevention, and appraisal costs.