Considering quality cost, time-value of money, and process quality improvement function in the economic product quantity model

Chiu, Yufang; Su, Daniel

doi:10.1080/10170661003679026

Cited by 14 publications

(9 citation statements)

References 21 publications

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“…At present, quality costing is recognized as the most essential element of QMS. It is a tool to not only improve the QMS, including determining quality costs, their analysis and the sources of their formation and planning their recognition through many projects based on economic efficiency, but it is also an element of enterprise's quality program (Campanella, 1999; Chiu and Su, 2010; Snieska et al , 2013; Prashar, 2014; Malik et al , 2016; Sturm et al , 2019).…”

Section: Literature Researchmentioning

confidence: 99%

Quality cost management in the SMEs of Poland

Biadacz

2020

TQM

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PurposeThe purpose of the study is to examine the research problem that represents an attempt to approximate the importance of quality costing in managing a modern enterprise using the selected enterprises from small and medium-sized enterprises (SMEs) in Poland.Design/methodology/approachThe primary goal of the research is a need to acquire knowledge about the use of quality cost accounts in enterprises operating in Poland. The research has been conducted in the SMEs of production and services. From October 2018 to December 2018, survey-based research was carried out in the selected SMEs of production and service in Poland. The targeted participants of the study are from the medium-sized enterprises, employing 50–250 people.FindingsThe pilot studies conducted in companies indicate that modern enterprises are focused on quality. Many enterprises declare to be continuously improving quality system and quality costing. However, generally, these are large companies that have implemented ISO standards, often part of international corporations. The survey result of the study shows that medium-sized enterprises still make little use of modern cost accounting variants. Based on the study, only 9.75% (39 enterprises) from a representative group of 400 companies from the sectors of manufacturing, services and production as well as service companies apply quality costing. Some of the other enterprises are only taking measures to implement quality cost accounting.Research limitations/implicationsThe research has been conducted in randomly selected SMEs in the form of a questionnaire interview. In order to further analyze the construction of quality cost management (QCM) systems and the use of information from QCM by enterprises, case study method should be used more widely.Practical implicationsThe results of the study provide useful help for companies that are quality-oriented and want to implement quality costing. The survey has been conducted in 400 enterprises, and the survey results of considered SMEs reveal the most important aspects of the application of quality costing.Originality/valueThe questionnaire used, the answers provided and the resulting conclusions fill the identified research gap. In the author's opinion, findings of research are relevant and useful, not only for accounting practice but also for theory. They show that although TQM and quality costing have been very popular in the literature since the 1990s, the degree of application of quality costing in practice (except for large, often international companies) is too low. So, the suitability of QCM in managing a modern enterprise from the SMEs should be promoted.

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Section: Literature Researchmentioning

confidence: 99%

Quality cost management in the SMEs of Poland

Biadacz

2020

TQM

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“…In total quality management process, CoQ program has focussed on customer satisfaction while tracking the cost to achieve it. A CoQ program is not responsible for quality improvements; rather it provides input and feedback to quality management program which is responsible for improvement (Campanella, 1999;Chiu and Su, 2010).…”

Section: Literature Review 21 Coqmentioning

confidence: 99%

Cost of quality: findings of a wood products ' manufacturer

et al. 2016

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Purpose – Today substantial investments are made to improve the bottom line and cost of quality (CoQ) is a tool that identifies weaker areas where these investments should be directed. In literature, the authors find various CoQ models and their applications but it is deficient in providing a standard format of a “Quality Cost Procedure” for a CoQ program’s company-wide deployment. A procedure was thus developed and its effectiveness was evaluated implementation. The paper aims to discuss these issues. Design/methodology/approach – CoQ program was implemented in the production department of a wood products’ manufacturer using the action research approach. Prevention, Appraisal and Failure Cost model was employed. Data collection was challenging, however, stakeholders were interviewed, data were acquired from Management Information System and various reports were reviewed for cost elements. Findings – Total CoQ as a percentage of sales was found to be 11, while as a percentage of material cost was 15 percent. It was found through the implementation that development of a quality cost procedure is highly iterative in nature and a standard format is proposed in the Appendix. This procedure worked satisfactorily and the company is confident in moving to the next phase of company-wide deployment of CoQ Program. Originality/value – A robust “Quality Cost Procedure” is developed, which not only helped the company but will serve CoQ implementers in their operational as well as tactical levels of management. CoQ implementation prior development of procedure brought conviction and accredited it. Practitioners can mold this procedure as per need, which will further enhance the body of knowledge on CoQ.

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“…In view of competitive market, companies must provide the best quality products and services for their survival (Chiu and Su, 2010). Quality has become the most crucial deciding factor (Lari, 2002).…”

Section: Introductionmentioning

confidence: 99%

Unleashing a decisive approach to manage quality costs through behavioural investigation

Chopra¹,

Singh

2015

Business Process Management Journal

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Purpose -Nowadays companies in the world are selling products by keeping quality as a central value for the customer. Quality-related costs arise from a series of activities performed in order to maintain the quality of product or service. Like other activities of business, quality costs can be programmed, budgeted, measured and analysed to attain the objective of better quality at lower cost. The purpose of this paper is to formulate a decisive methodology to optimize total quality cost (TQC), comprehensively. Design/methodology/approach -The TQC borne by any small-and medium-sized enterprise (SME) is the authentic base, which decides budget and other financial policies for running its ongoing quality programmes. To minimize TQC, one has to make sufficient cut backs in the total failure cost (TFC). Through regression analysis, TFC has been statistically modelled with primary quality costs (like preventive costs (PC) and appraisal costs (AC)). Subsequent graphical analysis has been delineated to elaborate relevant behaviour of different quality costs. At last, potency of suggested methodology has been strategically verified by executing a successful case study in an Indian Auto SME. The requisite optimization has been achieved by using Minitab Statistical Software and its practical validation is checked by conducting a two-sample t-test, exclusively. Findings -It has been found that TFC has a direct positive correlation with TQC and it increases with time. Further, TFC is inversely proportional with PC and AC. PC and AC act as independent costs, while TFC is a dependent or secondary quality cost. If the authors strategically allocate PC and AC in advance by using statistical advanced tools, then internal failure costs and external failure costs will diminish amply. Research limitations/implications -It inspires practitioner to harvest profits by inculcating quality cost optimization through lodged statistical behavioural investigation. Proposed approach is verified after performing an empirical study only on an automobile manufacturing SME. Further research is indeed required to testify the given methodology for more complex process configurations. Practical implications -Data related to quality costs is well available with practitioners but generally lying ignored. The case findings will motivate quality practitioners to use the proposed step by step approach for sustainable reduction in overall quality cost. Originality/value -SMEs find it difficult to lower their TQC due to severe scarcity of resources and funds. Moreover literature provides mainly the theoretical or qualitative cases which remain ineffective to propel SMEs towards the real world savings. But this manuscript will act as a unique road-map to de-code the behaviour of different quality costs quantitatively without ignoring the existing constraints of SMEs, especially in the developing nations.

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Considering quality cost, time-value of money, and process quality improvement function in the economic product quantity model

Cited by 14 publications

References 21 publications

Quality cost management in the SMEs of Poland

Quality cost management in the SMEs of Poland

Cost of quality: findings of a wood products ' manufacturer

Unleashing a decisive approach to manage quality costs through behavioural investigation

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