Taguchi loss function,

Definition of Taguchi loss function:

1. A graphical representation of a variety of non-perfect parts that can each lead to an overall loss for a company or manufacturer. Developed by Dr. Genichi Taguchi, a Japanese business statistician, the Taguchi loss function details the implications involved with poor quality and is largely credited for the increased focus on continuous improvement throughout the business world. It has also been instrumental to the Six Sigma movement and the concept of variation management.