At Elektroparts Manufacturers’ integrated circuit business, managers gathered data from a customer focus group and found that any output voltage that exceeds 55 ± 2.5 volts was unacceptable to the customer. Exceeding these limits results in an estimated loss of $75. However, the manufacturer can still adjust the voltage in the plant using a quick diagnostic test that costs $2.00.

a. Determine the Taguchi loss function.

b. Suppose the nominal specification remains at 55 volts. At what tolerance should the integrated circuit be manufactured?