Quality Loss Function/

Taguchi Loss Function

Course: Quality Management

Course Code : TE-4109

Nurul Ahad Choudhury

Lecturer, Department of IPE
 Quality Loss Function
Traditionally it is believed that any quality characteristics should
be measured within a specification limit, which is to be set either
by the designer or by the customer. But Taguchi, a famous expert
of quality, believes that the product acceptance based on
specification limit is a flawed concept. Not all of the quality
characteristics can be viewed within limits, they should be
considered best (or accurate) at a perfect measurement (mean or
target value).
Taguchi says that as soon as a quality characteristic departs from
its mean or target value ( nominal value), performance starts
deteriorating with increased customer dissatisfaction, although
measurements may be well within specification limits. Thus,
departure from mean is a quality loss, because the part may require
rework at extra time and cost or it may be considered as rejected.
Taguchi expresses this quality loss as a quadratic function known
as Quality Loss Function or Taguchi Loss Function.
 Quality Loss Function
Broadly, the Taguchi loss function explains that until a
component is manufactured in the nominal size, it incurred a
certain amount of loss to the manufacturer even though it
has been manufactured within specified tolerance limit. The
loss incurred by the component is zero in its nominal size
and gradually increase as it deviates from the nominal size.
 Traditional Approach to Quality
Traditionally, companies measure quality by the number of defects or the
defect rate. In this system, defects are identified through inspections of the
materials and products. Upper and lower quality limits are established.
Everything that does not fall within the limits is considered a defect. As long
as an output fell within acceptable limits (specification limits) around a
desired or nominal mean value, it is deemed conforming, good or
acceptable .This is known as the ‘goal post view of quality’.
The figure shows that this view of
quality states that losses arising
from deviation from the nominal
value are minimal until lower
specification limit or specification
limit is reached. Then, suddenly,
losses become positive and
constant beyond the limits,
regardless of the magnitude of the
deviation from the nominal value.
 Traditional Approach to Quality

This view is referred too as the goalpost view because it can

be conformed to the use of goalposts in football. If the extra
point goes between the goal posts it is considered a success.
It does not matter whether or not it is in the center or close
to the sides. However, if the ball goes wide, left or right, it is
unsuccessful

Example:
A great example of the goal post vie of quality and
specification limits is to insert a medical device into the chest
of a patient that is 25 mm in diameter (the nominal value). A
deviation of 5 mm above or below the nominal value is
acceptable to the surgeon performing the operation. Thus if a
medical device’s diameter measures between 20 mm and 30
mm , it is considered as conforming to specifications,
Continuous Improvement view of Quality
According to this view of quality, Taguchi states that
any variation away from the nominal (target) performance
will begin to incur customer dissatisfaction. As
the variation increases, the customer will gradually
(exponentially) become dissatisfied. This dissatisfaction is
deemed as loss of quality and shown in a parabolic curve
known as the loss curve, which depicts the loss of
deviating from the nominal within specification.
William Ducan defines loss function as, ‘’ A parabolic
representation of the loss function that estimates the
quality loss that results when quality characteristics
deviate from the target values. The cost of this deviation
increases quadratically as the characteristic moves further
from the target value
 Continuous Improvement view of Quality
The loss function demonstrates that
the target value and the bottom of
the curve intersect, implying that as
parts are produced at the nominal
value, no loss occurs. Also the curve
flattens as it approaches and
departs from the target value. This
shows that as products approach
the nominal value, the loss incurred
is less than when it departs from
the nominal value. Any departure
from the nominal value incurs a loss.

This curve clearly shows how even a little variation from the nominal
results in a loss, hence, the tendency should be to try and keep product
and process as close to the nominal value as possible. This is what is so
beneficial about the Taguchi Loss Function. It al the focus on the need to
continually improve.ways keeps
 Taguchi Loss function
 The loss generated by one unit is calculated using the
formula
 L(y)=k(y−m)2)
 k=c/d2
where:
L(y) - the loss in currency
k - a proportionality constant dependent upon
the organization’s failure recovery structure y -
actual value of quality characteristic,
m - target value of quality characteristic,
c - loss associated with the specification limit,
d - deviation of the specification from the target
value.
Taguchi Loss function
Taguchi Loss Function
Both views of Quality
 Types of Quality Loss function
There are many types of quality loss functions. However,
in all types, the loss is determined by evaluating
variation from a specific target. Taguchi’s philosophy
includes three general ways to evaluate the relationship
between quality and variability.
Nominal is best approach: In this
approach, the closer to the target
value, the better. It does not matter
whether the deviation is above or
below the target value. Under this
approach the deviation is quadratic.
The following exhibit portrays the
nominal is best approach. Some
examples include diameter of a vessel,
voltage, current etc.
 Types of Quality Loss function
The Smaller is Better Approach:
The smaller is better approach is when
a company desires smaller values. As the
value gets larger, the loss incurred
grows. The following exhibit portrays
the smaller is better approach. Some
quality factors are such that their values
need to be set as small as possible,
preferably zero. Examples include
shrinkage, wear, pollution etc.

Larger is better approach: Larger is

better occurs when a company desires
higher values of a characteristic.
Under this approach, the larger the
characteristic, the smaller the quality
loss function. The following exhibit
portrays the larger is better approach.
These factors are such that their values
need to be set as high as possible.
Examples are strength, life cycle etc.