A Note on the Appropriateness of Taguchi's Loss Function

Abstract Taguchi defined product quality in a universal way by adopting a quadratic quality loss function. In 1987, Kapur and Wang addressed the problem of setting economic specification limits for processes being not capable to meet given tolerances and, therefore, product quality has to be improved by inspection. Kapur and Wang selected for their investigations Taguchi's quadratic loss function. In this paper, we assume a asymmetrical linear quality loss function and show that the obtained optimal values differ greatly from those obtained by Kapur and Wang.