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Estimate Savings and Variation Reduction
These two items may serve as good component of a management report at the conclusion of an experiment. Since the main
reason for the experimental study should be to improve quality by reducing variations, its impact on the reduction of costs
from reduced scraps and warranty is of immense interest to the management. These options allows you to produce
graphical representations of the cost savings resulting from the corresponding variation reduction.
Calculation of Savings using Loss Function
The savings from improvement is calculated by using the analytical model (Loss Function) proposed by Dr. Genechi
Taguchi. A company manufacturing and selling parts will always have scraps and warranty. Therefore, theoretically
speaking it will always incur a loss. So it is the reduction of loss which is attributed as savings.
1. Select Option
Open the file you want to work with. Carry out complete analysis of results. This is necessary, since the
calculated values of S/N for the optimum performance may be used for calculations of savings.
From the main screen, click on Loss menu and select Nominal or General option depending on the information
you have available and the quality characteristic(QC) of your experiment.
If your result bears Nominal QC, you will use the Nominal option for calculation of loss. This option will require
that you know CUSTOMER TOLERANCE and other production information. If on the other hand, you do not
know customer tolerance, but know current LOSS, current S/N and improved design S/N, then you should go for
the General case.
Nutek, Inc.
Qualitek-4, Automatic Design and Analysis of Taguchi Experiments
Reference Manual
Version: 06.01