Interactive process quality improvement

Richard L. Marcellus, Maqbool Dada

Research output: Contribution to journalArticlepeer-review

Abstract

An ongoing production process produces defective parts at random intervals. Each defective part provides a learning opportunity which the decision maker may use to improve the process by investing resources to identify and remove the causes of the defective. For various cost criteria, it is optimal to invest in learning until the probability of producing a defective becomes sufficiently small. This policy has economic interpretations in terms of marginal benefits. In addition, the optimal policy for expected discounted present cost has an interpretation in terms of tradeoffs between 'cost of failure' and 'cost of prevention'. The shape of the tradeoff curve gives insight into the controversy between the traditional and zero defects views towards cost of quality.

Original languageEnglish (US)
Pages (from-to)1365-1376
Number of pages12
JournalManagement Science
Volume37
Issue number11
DOIs
StatePublished - Jan 1 1991
Externally publishedYes

ASJC Scopus subject areas

  • Strategy and Management
  • Management Science and Operations Research

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