Which one of the following statements about costs associated with process variab

Question

Which one of the following statements about costs associated with process variability is true?

Traditional and Taguchi's views on variability costs are in reference to process deviation, as well as target, lower and upper process control limits.

Taguchi's view is that any deviation of a product toward its upper and lower specification limits represents an additional cost to the firm and the customer.

The traditional view of variability costs gives firms an incentive to strive for process perfection.

All of the above are true

None of the above are true

Explanation / Answer

All of the above are true.

Taguchi's statistical method is a method used to improve the quality of the goods produced. He depicted a variation in statistics which has both upper and lower control limits. Customers will dissatisfied with the products if the variation will cross both the limits. Thus the company also has to spend an extra cost to bring those variation within the limits.

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