According to Taguchi, quality is related to what aspect of a product?

Taguchi's approach to quality emphasizes that quality is fundamentally tied to the financial loss to society, often referred to as the concept of "loss function." According to Taguchi, the true measure of quality is not just in whether a product meets certain specifications, but in how much deviation from those specifications can lead to financial losses, both for the manufacturer and the consumer. He argues that poor quality results in costs related to defects, warranty claims, and customer dissatisfaction, which ultimately affect societal welfare.

This perspective shifts the focus from traditional quality assurance methods, which often concentrate on the product itself, to a broader consideration of quality that encompasses the long-term effects of decisions and processes on both consumers and society at large. By doing so, Taguchi encourages organizations to design products and processes that minimize variability and improve overall quality, thereby reducing associated social costs.

In contrast, while production methods, market demand, and employee satisfaction are important factors in the overall success of a product or organization, they do not directly encompass Taguchi's holistic view of quality in relation to financial impacts on society.