Page 641 - Design for Six Sigma a Roadmap for Product Development

594 Chapter Sixteen

where

loss of exceeding functional limit
A 0

A
loss at factory for exceeding factory standard
(16.31)
where is called the safety factor.
Example 16.11.TV Color Density Recall Example 13.1. Assuming that the
customer tolerance limit 0 for color density y is equal to 7, if the color den-
sity y is either greater than T 7 or less than T 7, 50 percent of the cus-
tomers will be unhappy and will demand replacement of their TV sets, and
the replacement cost A 0 will be $98. However, if the TV is repaired within
the factory, the repair cost will be $10, and then the producer tolerance
should be
0 0 7
10
A
0 0 2.24

98/10
3.13
98
3.13
A 0
that is, the producer tolerance should be 2.24, and the safety factor in
this example is 3.13.
Justification for safety factor and tighter producer tolerance. From
Fig. 16.9, we can see that if a company does not have any aftersale cus-
tomer service, the cost for customers due to poor quality will follow the
quadratic curve. If the company cannot control the variation in design
requirement, the cost for customers will be high. Clearly this is very
bad for customers as well as for the company. Actually, the company
may lose even more than the quality loss cost, because customer dis-
satisfaction, bad reputation, and bad publicity will hurt the company
even more than they hurt the customers. For example, if a famous
restaurant chain had one incidence of food poisoning, the loss to the
customer will be medical cost, a few days or weeks without pay, and so
on, but the cost for the restaurant chain will be bad publicity, litiga-
tion, loss of consumer confidence, and big loss in sales, which could
very easily reach a magnitude higher than the customer loss.
Having a customer tolerance limit of 0 and aftersale service, the
company can reduce the maximum customer loss to below the external
repair cost A 0 . If the company can set a tighter producer tolerance lim-
it , and practice “preventive repair” at the cost A, then the maximum
loss to the customers will be reduced to the internal repair cost A.

Smaller-the-better requirement. For the “smaller-the-better” require-
ment, the quality loss function is
A 0
L(y) y 2
2
0