A tailor decides to use Taguchi's quality loss function to analyze his shirt making process

Knowing it to be parabolic in shape and of the form L(y) = k(y - t)2 where t is the target, y is the actual measurement, and k is the process constant, the tailor decides to use a recent customer order to calculate his process parameters. He takes the custom shirt and measures the collar, which was requested to have a 17.5" collar but actually has a 17.75" collar. The customer notices the difference and demands a 50% reduction in the price of the shirt, which cost the tailor $45 to make. Instead of selling the shirt for $175, the tailor will reduce his price to $87.50. What is the tailor's process constant for a silk shirt?
What will be an ideal response?

Answer: The tailor is missing out on $87.50 of profit by reducing his price to this extent,
so the L(y) = 87.50 = k(y - t)2 where t = 17.50 and y = 17.75.
So, $87.50 = k(17.5 - 17.75)2
k = $1400/inch squared