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A cost of quality decision support model for lean manufacturing: activity‐based costing application

Amir H. Khataie (Department of Mechanical and Industrial Engineering, Concordia University, Montreal, Canada)
Akif A. Bulgak (Department of Mechanical and Industrial Engineering, Concordia University, Montreal, Canada)

International Journal of Quality & Reliability Management

ISSN: 0265-671X

Article publication date: 26 July 2013

Abstract

Purpose

The purpose of this article is to introduce a novel cost of quality (COQ) decision support model (DSM), which can help management to track the effect of changing each incorporated value added (VA) and non‐value added (NVA) activity on each other's cost as well as on the quality costs in real time.

Design/methodology/approach

System dynamics (SD) is used as the modelling tool due to its dynamic characteristic and its advantages; such as the possibility of integrating qualitative factors and defining learning loops. In order to enhance the performance of the model, activity‐based costing (ABC) cost structure has been integrated.

Findings

Lean manufacturing (LM) focuses on the methodologies and approaches that can help an enterprise to reduce the waste factors in its processes. Few studies have proven the capability of ABC in providing valuable cost information for LM implementation due to its activity‐oriented nature. This study is another step towards showing the advantages of ABC in controlling the COQ via using a novel SD modelling methodology.

Originality/value

The model can guide management to establish an LM‐oriented quality policy and control the incorporated costs effectively.

Keywords

Citation

Khataie, A.H. and Bulgak, A.A. (2013), "A cost of quality decision support model for lean manufacturing: activity‐based costing application", International Journal of Quality & Reliability Management, Vol. 30 No. 7, pp. 751-764. https://doi.org/10.1108/IJQRM-Jan-2011-0016

Publisher

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Emerald Group Publishing Limited

Copyright © 2013, Emerald Group Publishing Limited