The Ops Manager of a small company producing a particular high-precision component is concerned about the variability of the manufacturing process. For a key dimension of the component, the following information is provided. Currently, the process mean is 0.3005 cm and the standard deviation is 0.0075 cm. The target value of the design is set at 0.30 cm. The given design specifications are symmetric around the target value; d = 0.0215 cm.
A manager can use the Taguchi Loss function and the related quantification of poor quality for a number of analyses.

PROCESS SELECTION: How to assess the current process capability? Is it acceptable?

PROCESS SELECTION and CAPACITY PLANNING: What is the annual cost of the current process due to process capability (quality loss)?

PROCESS IMPROVEMENT DECISION: The expected loss for any unit produced at the tolerance limits (design specs) is estimated at $3.50, and the annual production is 200,000 units. If the company management were to pursue a six-sigma program how much should the company be willing to invest in variability improvements?