TY  - JOUR
AB  - Quality improvement decisions are the catalyst for substantial
technological improvements being made in the manufacturing sector. The
new technology, however, has developed faster than techniques for
evaluating capital investments in such improvements. This is largely
because the benefits of quality improvement technology are difficult to
quantify. The Taguchi loss function is incorporated into a net present
value capital budgeting technique to provide an estimate of these
benefits. Describes the loss function in relation to key quality costs:
appraisal and prevention costs, and internal and external failure costs.
External failure cost savings are generated by reducing variability in
the manufacturing process. These savings are then compared with the cost
of the quality improving technology. Results indicate that these savings
can be substantial, depending on the achieved reduction in the process
variability, the cost of capital, and on the estimate of the cost of
processing a customer’s return of the product.
VL  - 11
IS  - 6
SN  - 0265-671X
DO  - 10.1108/02656719410064612
UR  - https://doi.org/10.1108/02656719410064612
AU  - Margavio Geanie W.
AU  - Fink Ross L.
AU  - Margavio Thomas M.
PY  - 1994
Y1  - 1994/01/01
TI  - Quality Improvement Using Capital Budgeting and Taguchi’s Function
T2  - International Journal of Quality & Reliability Management
PB  - MCB UP Ltd
SP  - 10
EP  - 20
Y2  - 2024/09/19
ER  -