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Loss Function

Model introduced by Dr. Genichi Taguchi used to approximate the financial loss for any particular deviation in a product using the best specification target and for the amount of variation in any process.

The model argues that there is an increasing loss (both for producers and for society at large), which is a function of the deviation or variability from the best or perhaps target value of a parameter. The greater the deviation from target, the greater is the loss. The notion that loss is dependent on variation is very well established in some design theories, and at a technique level is associated with the assistance and the cost related to dependability.

Formulas:

Loss at a point: L(x) = k*(x-t)^2
k = loss coefficient
x = measured value
t = target value

Average Loss of a sample set: L = k*(s^2 + (pm – t)^2)
s = standard deviation of sample
pm = process mean

Total Loss = Avg. Loss * number of samples

The Taguchi methodologies are sometimes linked with moderately limited aspects of design, example, single piece parts, rather than very complicated products, procedures and/or services. Some professionals will also argue that the net results of the Taguchi methodology may not always offer enhanced design resolutions than what could achieved by using standard methods.

You can find more information at Leeds Metropolitan University, and for an example chart visit Universit?t Magdeburg.

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Last Updated: Saturday, 10-Jun-06 15:50:57 PDT

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