Which two factors does Taguchi's evaluation of quality depend on?

Taguchi's evaluation of quality hinges on the concepts of the loss function and the signal-to-noise ratio. The loss function quantifies the economic loss associated with poor quality, emphasizing that any deviation from the target value incurs a cost to society and the organization. This perspective encourages a focus on minimizing variation in processes to achieve higher quality outcomes.

The signal-to-noise ratio is a measure used to evaluate how strongly a desired signal (or the desired quality performance) is affected by noise (or variability). A higher signal-to-noise ratio indicates that a system reliably produces goods that meet quality specifications, thus enhancing overall performance.

Both of these factors enable organizations to quantify quality not just in terms of defects but also by considering the broader impact of variation and the cost associated with poor performance. This approach is instrumental in driving continual improvement initiatives within the Six Sigma framework, aligning with the overarching goals of reducing waste and enhancing quality.