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Article
Publication date: 3 December 2018

Jin Bei

As China embarks upon a new era of high-quality development, it is increasingly important and imperative for China’s economic development to live up to its real nature…

Abstract

Purpose

As China embarks upon a new era of high-quality development, it is increasingly important and imperative for China’s economic development to live up to its real nature, which is to satisfy people’s growing needs for a better life. The paper aims to discuss this issue.

Design/methodology/approach

The paper attempts to discuss the implication of HQD and its related theoretical issues from the basic theory of economics, and literature review. It is necessary to return to Marx’s “dual character of commodity” to check the theoretical foundation of this issue, based on the duality methodology, namely, the duality of the value of use and the value of exchange.

Findings

Moving from HSG phase to HQD phase constitutes a major challenge and an arduous task that is extremely difficult both theoretically and practically. A series of new problems crop out as to the theoretical understanding and practical resolution. Fundamentally speaking, this new dynamic mechanism intrinsically requires a perfect integration of the instrumental rationality of market economy and the value-based rationality of economic development.

Originality/value

This new momentum requires a perfect match between the instrumental rationality of market economy and the value-based rationality of economic development.

Details

China Political Economy, vol. 1 no. 2
Type: Research Article
ISSN: 2516-1652

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Article
Publication date: 1 March 1990

Donald N. Merino

Recent surveys on the use of quality‐related costs in manufacturing industries indicated that, while quality cost data are valuable for deciding on prevention activities…

Abstract

Recent surveys on the use of quality‐related costs in manufacturing industries indicated that, while quality cost data are valuable for deciding on prevention activities, most companies do not understand the fundamental economics of quality. In addition, the published literature fails to discuss this issue adequately. The literature does indicate that cost accounting systems are inadequate in providing quality cost data and that executives often underestimate the impact of quality on the company′s profitability. To help overcome these problems a cost/ benefit classification is proposed and technical limits are equated to the Cost of Quality for capital‐intensive prevention projects. The manufacture of ethanol is used as an example to demonstrate the concepts and methodology of using technical limit analysis and its conversion to an economic “incentive” using engineering economics. This economic incentive could be used in Cost of Quality reporting and for the management of this technology.

Details

International Journal of Quality & Reliability Management, vol. 7 no. 3
Type: Research Article
ISSN: 0265-671X

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Article
Publication date: 8 June 2012

Zhuo Zhang and Yanyu Wang

The purpose of this paper is to establish a three‐dimensional service house of quality (HOQ). The new service HOQ adds a dimension of quality economics to solve the…

Abstract

Purpose

The purpose of this paper is to establish a three‐dimensional service house of quality (HOQ). The new service HOQ adds a dimension of quality economics to solve the problems of economic evaluation in the process of transferring customer requirements into service characteristics by traditional HOQ.

Design/methodology/approach

Based on the traditional two‐dimensional HOQ, this paper constructs a three‐dimension service HOQ by adding an economic dimension into the traditional structure, so that the transformation process from customer requirements into service characteristics can be evaluated with quality economic perspective. The key concern of this new model is to balance the quality improvement and economic gain of a service. The other improvement of this paper is that it uses structural equations to present the coefficient matrix in the new HOQ model to avoid human errors in the evaluation. A case study is used to verify the effectiveness of the new model.

Findings

Quality gains and costs should be considered in service design and quality improvement. The three‐dimensional service HOQ uses the dimension of quality economics to balance customer requirements and service characteristics, which is more effective than the traditional one.

Practical implications

The method exposed in the paper can be used by service companies for decision making in service design and quality improvement.

Originality/value

This paper establishes a new three‐dimensional HOQ, by which quality economics can be effectively analyzed in service design and quality improvement.

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Article
Publication date: 1 August 2004

Danupun Visawan and James Tannock

The study of quality economics for manufacturing has focussed mainly on investments and costs, rather than attempting to quantify the benefits of improved quality in the…

Abstract

The study of quality economics for manufacturing has focussed mainly on investments and costs, rather than attempting to quantify the benefits of improved quality in the market. This article presents an approach based on both costs and benefits. Systems dynamics‐based simulation has been employed with an optimisation technique, to identify quality spending levels which result in maximum overall profit. The simulation models are based on a Thai automotive manufacturer, which had employed Kaizen for many years, and hence this quality improvement approach was simulated. Two market conditions were modelled: fixed and variable‐price according to the market response to changes in quality level. Optimum profits were found at higher levels of quality spending than actual company spending. The paper examines the details of the optimum condition for the variable‐price market condition. Conclusions are drawn concerning quality improvement strategies and the potential effects of different market pricing conditions on optimum quality spending.

Details

International Journal of Quality & Reliability Management, vol. 21 no. 6
Type: Research Article
ISSN: 0265-671X

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Article
Publication date: 1 December 1999

Yossi Bester

Notes that in many organizations, quality management fulfills a role which is not measured or even quantitively estimated. Notes that elements such as sales and…

Abstract

Notes that in many organizations, quality management fulfills a role which is not measured or even quantitively estimated. Notes that elements such as sales and productivity are principally dollar‐oriented and that the quality manager will feel an outsider if he/she is unable to communicate in such terms. Suggests that the quality economics principle has been used to overcome this communication gap. Looks at factors such as cost of quality and value of quality, net value‐added productivity and quality by objectives. Notes that the integration of cost of quality, added value productivity and quality by objectives complements the economic value of quality.

Details

The TQM Magazine, vol. 11 no. 6
Type: Research Article
ISSN: 0954-478X

Keywords

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Article
Publication date: 1 December 1999

A.V. Feigenbaum

General Systems Company, Inc. has been directing its experience in installing quality systems throughout the world, as well as its research department’s focus on the…

Abstract

General Systems Company, Inc. has been directing its experience in installing quality systems throughout the world, as well as its research department’s focus on the development of new quality system strengths, to support and implement the quality growth opportunities of the twenty‐first century. The key is transforming quality from the past emphasis upon the reduction of things gone wrong for the customer, to emphasis upon the increase in things gone right for the customer, with the consequent improvement in sales and revenue growth. This customer value enhancement objective is a fundamentally new, different and much more effective business quality goal to drive the organization’s work from product and service design and development to customer satisfaction. For many organizations this requires a basic change in their business orientation and in their quality systems. Describes this new quality discipline, termed Total Quality System 2000 and its ten systems powers.

Details

The TQM Magazine, vol. 11 no. 6
Type: Research Article
ISSN: 0954-478X

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Article
Publication date: 21 November 2019

Maria Cecilia Mancini, Filippo Arfini and Marianna Guareschi

The purpose of this paper is to analyse the determinants and the impact of some of the more significant innovations applied to the localised agri-food systems (LAFSs…

Abstract

Purpose

The purpose of this paper is to analyse the determinants and the impact of some of the more significant innovations applied to the localised agri-food systems (LAFSs) bearing a (Geographical indication) GI product, considering the multi-faceted aspects of innovation and how the producers have managed the implementation of such innovations.

Design/methodology/approach

Parmigiano Reggiano (PR) system is considered as a representative GI product, with the system showing the features of an LAFS in terms of governance, territorial reputation and quality perceived by consumers. PR innovations from 1860 to 2015 are analyszed and classified as technological and organisational. Three determinants of innovations are identified in the PR LAFS: consumer needs; value chain (VC) strategies; and governance. Finally, the innovation impact on the VC, product quality and rural development are studied.

Findings

The analysis shows the positive and negative impacts of innovations. The main finding is that governance action is crucial to pursuing quality strategies and maintaining economic value at production level.

Research limitations/implications

The research analyses some of the more significant innovations applied to the PR VC. Despite a large number of innovations were introduced from 1860, the authors had to choose just some of them, considering also the availability of dates.

Practical implications

The research gives some recommendation to the PR Consortium, in specific, or governance institutions in LAFS context in general, to achieve rural development goals. The research shows that governance action is crucial to pursuing quality strategy and to maintaining economic value at production level. This implies that instead of simply raising yield per cow, the VC should aim at increasing (or maintaining) the value of production by the way of marketing strategies. Organisational, marketing and technological innovations adopted in synergy and in joint agreement among the chain actors would bring mutual benefit for the VC and for the territory.

Social implications

The research shows the trade-off between VC competiveness and rural development. In fact, the increase of VC competiveness involves a growth of cost of production and the decrease of labour force. Thus, it creates a loss of employee and increases the distance between dairies with high amount of capital and familiar/smaller dairies which have low amount of capital to invert, that obstructs rural development especially in disadvantage area.

Originality/value

The paper analyses the determinants and the impact of some of the more significant innovations applied to LAFS which are home to a GI product, considering the multi-faceted aspects of innovation and how producers have managed the implementation of such innovations. It underlines implication on territory and sustainability.

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Article
Publication date: 1 August 2005

Weng M. Chan, Raafat N. Ibrahim and Paul B. Lochert

The purpose of this paper is to study the interaction of economics of production with process quality, when multiple key quality characteristics are present. Specifically…

Abstract

Purpose

The purpose of this paper is to study the interaction of economics of production with process quality, when multiple key quality characteristics are present. Specifically, the paper aims to analyse the possibility of investing in a production process to reduce its variances and the impact on a multivariate quality loss function.

Design/methodology/approach

A bivariate inventory‐planning model is developed, in which the optimal investment for reducing process variances and the optimal lot size are jointly determined. A case study with industrial data is presented to illustrate the possible solution procedures and the potential advantages of the proposed model.

Findings

It is found that by using the previous approaches to analyse the interaction between the economics of production and process quality, a company will underestimate the cost of quality, especially the expected external failure cost (quality loss), and ultimately invest less into the prevention activities to improve the process.

Originality/value

The proposed model can help managers to compare different production processes and also guide the managers towards better choices for process improvement. To the best of our knowledge, this paper is the first to integrate the economic production quantity (EPQ) problem with the process quality consideration for products with multiple quality characteristics.

Details

International Journal of Quality & Reliability Management, vol. 22 no. 6
Type: Research Article
ISSN: 0265-671X

Keywords

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Article
Publication date: 1 April 2006

Johannes Freiesleben

The purpose of this paper is to construct a basic profit model of quality so as to highlight the economic implications of process quality in an accessible way.

Abstract

Purpose

The purpose of this paper is to construct a basic profit model of quality so as to highlight the economic implications of process quality in an accessible way.

Design/methodology/approach

Economic evaluation of the four profit parameters (price, unit costs, sales, fixed costs) using microeconomic analysis. For each parameter, the effect of better quality is described and a general logic to assess its profit impact developed.

Findings

For all four examined parameters, it can be shown that better quality results in better financial performance. Profit and quality are therefore positively correlated.

Research limitations/implications

The presented research is of conceptual nature, based on the objective to establish a general profit model of quality. The single parts of the described economic logic of quality might be subjected to empirical examination.

Practical implications

The arguments presented in this paper can help quality practitioners to better understand the economics of striving for best possible quality.

Originality/value

This paper fulfills an identified research gap by combining the disciplines of economics and quality management and tries to advance a profit perspective on quality which is suited to replace the still dominant cost perspective.

Details

Measuring Business Excellence, vol. 10 no. 2
Type: Research Article
ISSN: 1368-3047

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Article
Publication date: 1 January 1987

J.J. Plunkett and B.G. Dale

A review of the literature of quality‐related costs indicates the domination of the prevention‐appraisal‐failure categorisation of costs, a similar pre‐occupation with…

Abstract

A review of the literature of quality‐related costs indicates the domination of the prevention‐appraisal‐failure categorisation of costs, a similar pre‐occupation with in‐house costs and little consideration of supplier and customer‐related costs. Most of the data are of questionable value because not suitably qualified by detailing inclusions and methods of computation, and there is scant coverage of measurement and cost collection, or warnings of limitations in costing exercises. Failure to discuss definitions, and lack of guidance on cost collection and treatment of overheads and valuation of scrap are all notable omissions in the literature so far.

Details

International Journal of Quality & Reliability Management, vol. 4 no. 1
Type: Research Article
ISSN: 0265-671X

Keywords

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