1. Compute the value of k, the cost coefficient in the Taguchi quality loss function (QLF), L(x) = k(x − T)2. Calculate the estimated quality loss for each of the observed measurements. Additionally, calculate the expected (i.e., average) loss per unit for the production process as a whole.
2. What are the estimated manufacturing cost savings per year associated with the reduction in rework costs?
What is the annual financing cost savings associated with the reduction in inventory holdings?
Provide a dollar estimate of the total annual cost savings associated with the recently enacted quality improvements.
3. Taylor has obtained construction estimates. To increase the capacity of the bar to 80 seats, the dining room to 120 seats, and the kitchen to 25 meals at the same time would cost $240,000, which Taylor could finance for $5,000 per month for the next 4 years. There would be no change to the parking lot. Given your analysis above, prepare a brief recommendation to Taylor regarding expanding the restaurant. Explain why you think they should or shouldn’t expand using the info from the attached solved problem
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