A model for supply chain design considering the cost of quality

Abstract

a b s t r a c tRecent studies have shown that the cost of quality (COQ) is of more strategic and economic importance than previously conceived. Whereas previous works have applied COQ as an internal performance measure within companies, the purpose of this paper is to present a model for supply chain design that computes the COQ as a global performance measure for the entire supply chain. In addition, rather than assume an exogenously given COQ curve, our model computes COQ in terms of internal operational decisions such as the error rate at inspection and fraction defective at manufacturing. The model can be used to design a logistic route that achieves a minimum total cost while maintaining an overall quality level and to evaluate the impact of investment in quality to increase overall profits. The behaviour of the model is illustrated with numerical examples that show how the COQ function changes depending on various parameters.

Applying life cycle management of colombian cocoa production

“…On the other hand, TLF quantifies the variability of a given process. It has been used to analyze the interaction between the economics of production and process quality in the manufacturing industry (Castillo-Villar et al, 2012). TLF is an effective tool for justifying and evaluating the effects of quality improvements such as tolerance tightening strategies, whose effects on quality have been assessed from an economic standpoint (Berk & Berk, 2000;Bernardo et al, 2001;Ozdemir & Maghsoodloo, 2004;Liao & Kao, 2010).…”

Quality Requirements and Conformity of Welded Products in the Manufacturing Chain in Welding Network

“…Usually quality costs focus on an individual company and internal costs instead of the whole production chain [40]. In a welding network, quality costs are more closely followed by the focal company.…”

“…Failure costs can be divided into internal and external failure costs. Internal failure costs result from a product that does not conform to the requirements before it meets the customer, whereas external failure costs occur if the product is already shipped to the customer with defects [40]. Table 5 shows examples of reasons for quality costs divided into categories prevention, appraisal, internal failure and external failure costs.…”

“…Costs of quality result from not producing requisite quality or ensuring quality in accordance with requirements. Quality costs have more strategic and economic importance than earlier costs [40] by affecting profit and helping to identify the weak points in the process [43]. Many models have been developed to measure or identify quality costs.…”

Global Pharmaceutical Supply Chain: A Quality Perspective

“…Walters & Lancaster (2000) and Walters & Jones (2001) developed value chain concepts based on minimizing validation cost of each activity in supply chains. Castillo-Villar, Smith, & Simonton (2012) show how these costs can be measured or calculated.…”