Karen Gunna Leather is a Toronto-based company that manufactures and sells leather accessories such as cell phone pouches, wallets, leather belts, and purses. Based on the product specifications of wallets, the thickness of the leather is to be 0.1905 0.0030 inch. It costs $15 to manufacture and $18 to scrap a piece that does not meet these specifications. The thickness measure for the unit just completed is 0.1923 inch. Required: 1. Use the Taguchi quality loss function, L(x), to determine: a. The value of the cost coefficient, k. Round your final answer to the nearest whole dollar amount.

b. The estimated loss (total quality loss) for the unit just completed. Round your final answer to two decimal places.

2. Assume that Karen Gunna Leather can eliminate the uneven thickness by adding a production worker, at the critical point, for $1.50 per unit: a. At what tolerance should the leather wallets be manufactured? Round your final answer to five decimal places.

b. What should be the production specification in the case in terms of lower and upper limit? Round your final answers to five decimal places.

3. Discuss the difference between goal post conformance and absolute quality conformance as these relate specifically to the case of Karen Gunna Leather.