ABSTRACT
Cost is more important than quality but quality is the best way to reduce cost.
Genichi Taguchi
The quadratic loss function (QLF), also known as the quality loss function, is a metric developed by Genichi Taguchi that focuses on achieving the target value rather than on performance within the wider specification limits. Genichi Taguchi, a Japanese engineer, developed the quality loss function based on the economic consequences of not meeting target specifications. Using the QLF allows continuous improvement teams to quantify improvement opportunities in monetary terms, the language of upper management. The QLF translates variability into economic terms by calculating the relationship between performance and financial outcome. The general QLF is shown in Equation 16.1.
