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508   Chapter Fourteen


              settings; therefore, by choosing the parameter setting in a low-
              sensitivity area, we can reduce Var(Y) significantly, although we have
              the same variation of either design parameters or noise factors.
                In summary, the tasks of parameter design are as follows:
              a. Adjusting the nominal settings of design parameters E(xi)   i,
                 for i   1 ... n, to reduce the sensitivities of functional perfor-
                 mance y to the variations of design parameters and noise factors,
                 and as a result, reducing the system functional performance
                 variation Var(Y).
              b. Adjusting the nominal settings of design parameters to shift
                 mean performance level   y to its target value T.
              The major objective of task a is to make the system insensitive or
              “robust” to all sources of variation. Therefore, Taguchi’s parameter
              design is also called robust parameter design.
           3. Tolerance design. Tolerance design is usually performed after para-
              meter design. The major task of tolerance design is to set the accept-
              able variation level for design parameters. Specifically, tolerance
              design is to set a pair of limits for each design parameter x i such that
                i    i   x i    i    i , where usually   i   3C pσ i , where C p is the process
              capability index (when C p   2, that is a Six Sigma tolerance limit). By
              choosing high-grade parts, or more precise (expensive) manufacturing
              methods, we can reduce   i ; by Eq. (14.10), we can reduce Var(Y) as
              well. However, this approach has the following inadequacies:
              a. It is an expensive method.
              b. We can usually control and reduce the variation of design para-
                                  ...
                 meters   for i   1 n, only. In other words, we can control piece
                         i
                 to piecewise variation only by tightening tolerances for design
                 parameters. We can seldom effectively control the external vari-
                 ation and deterioration.
              Therefore, tightening tolerance is inadequate in variation reduction
              for system performance; robust parameter design is an important
              step in improving quality level by reducing variation.
                Although minimizing the quality loss is the goal for Taguchi’s
              robust parameter design method, that method does not work on loss
              function directly. Taguchi’s parameter design method is an integra-
              tion of the Taguchi orthogonal array experiment and signal-to-noise
              ratio analysis. The signal-to-noise ratio is related to the loss func-
              tion, and we discuss it in detail in the next section.


           14.3 Loss Function and
           Signal-to-Noise Ratio
           In the field of communication engineering, signal-to-noise ratio (S/N),
           which is also related to loss function, has been used as a performance
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