Analysis of quality uncertainty due to information asymmetry

Abstract

Purpose -Total quality management (TQM) at the industry end along with quality function deployment (QFD) molds product quality. It flows to the customer at the market end with a value called quality perception, embedding the concept of probability of acceptance and quality uncertainty. The purpose of this paper is to analyze and validate the existence of upcoming term "quality uncertainty" in the backdrop of information asymmetry. Design/methodology/approach -Theories of probability and reliability engineering are used for mathematical modeling and analysis. Fault tree and success tree method is specifically applied to analyze quality uncertainty and quality perception at the market end. Findings -Quality perception is an outcome of combined probability of information symmetry and TQM or product quality, whereas its inverse is quality uncertainty. Determining quality perception or uncertainty of any product type is possible in a market scenario, and its impact on product life cycle and company revenue can be accessed accordingly.Research limitations/implications -The model proposed here helps compute information symmetry and quality perception at the market end. More data exploration methods can be investigated to apply this model precisely in real life setting. Practical implications -It is of equal importance to measure quality uncertainty due to information asymmetry and commensurate revenue loss to the company. Based on this, a policy mix of maneuvering for quality perception enhancement can be developed at both ends of supply chain processes. Originality/value -With quality perception defined and modeled, the paper attempts market orientation to quality paradigm. It adds a new dimension to quality management.

Information symmetry, quality perception, and market dynamics

“…Though Mitra and Golder (2006) offered precise computation of perceived quality, they could not describe the failure of quality at market‐end. The approach by Wankhade and Dabade (2006a) that considers the theories of information economics, quality management, marketing science, and reliability engineering, seems suitable for modelling purpose.…”

“…The basic model is to be extended to a market with major players (both HQPs and LQPs) by using the theories of reliability engineering. TQMI and information symmetry when used in parallel leads to quality perception, whereas, inverse of TQMI and information asymmetry used in series leads to quality uncertainty (Wankhade and Dabade, 2006a). Similarly many companies can be positioned in series or parallel for quality uncertainty or perception, respectively.…”

“…At this juncture Wankhade and Dabade (2004, 2005a, b, 2006a, b, 2007) have carried out required foundation work on quality uncertainty due to information asymmetry in quality management. Information symmetry is the inverse of information asymmetry.…”

“…Information asymmetry is a case in point. It is an established fact that market is driven by many forces, known as well as hidden, and every analysis is devoid of perfection (Wankhade and Dabade, 2006a). Traditional economics and traditional parameters of market analysis are being replaced by modern one.…”

Corporate Governance, Disclosure Dan General Equilibrium Terhadap Asymmetry Information - Perspektif Ekonomi Mikro Dan Perspektif Akuntansi

“…Hasil ini melengkapi temuan Maskin dan Riley(Rev Econ Stud 67: 413-438, 2000) dengan hasil yang serupa untuk asimetris lelang Private-Value. Pada akhirnya, perbandingan dengan keseimbangan dominance-solvable dalam lelang harga kedua menunjukkan Milgrom-Weber (Econometrica 50: 1089-1122, 1982a) menemukan bahwa lelang harga kedua, memberikan hasil/pendapatan setidaknya sebanyak lelang harga pertama dan gagal karena adanya asimetri: di beberapa kasus lelang pertamaharga memberikan pendapatan yang diharapkan lebih besar, dalam beberapa kasus malah mendapakan lebih sedikit / kurang Wankhade et al (2006),. dengan judul Analysis of quality uncertainty due to information asymmetry.…”