Models for Measuring and Accounting for Cost of Conformance Quality

P. Nandakumar, S. M. Datar and R. Akella
Additional contact information
P. Nandakumar: Fuqua School of Business, Duke University, Durham, North Carolina 27706
S. M. Datar: Graduate School of Business, Stanford University, Stanford, California 94305
R. Akella: Graduate School of Industrial Administration, Carnegie Mellon University, Pittsburgh, Pennsylvania 15213

Management Science, 1993, vol. 39, issue 1, 1-16

Abstract: We build a model to measure and account for the cost of quality. We incorporate the impact of quality on lead time variance and on service reliability and demand. Quality costs are a joint and nonlinear function of various parameters of the manufacturing process. Our model shows that it may not be optimal for quality improvement efforts to target products that have the highest defective levels, largest direct costs or consume the maximum capital resources. A stochastic dynamic programming model is developed to evaluate the optimal trade-offs across prevention and appraisal costs, and the costs of failure.

Keywords: conformance quality; cost of quality; dynamic programming (search for similar items in EconPapers)
Date: 1993
References: Add references at CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.39.1.1 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:39:y:1993:i:1:p:1-16

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().