Quality Improvement and Learning in Productive Systems

• DOI: 10.1287/mnsc.32.10.1301
• Publication Date: 2008-11-08T14:58:02Z
• Authors: Charles H. Fine
• Keywords: Quality costs; Learning effect

Recent interest in product quality suggests that effort devoted to improving the of manufactured products may reduce unit costs. This conjecture—that can lower costs—challenges traditional assumption costs increase with increased assurance activities and has significant implications for management. By introducing idea a quality-based learning curve, this paper links previously disjoint literatures control curves explain why high low need not be inconsistent. When are affected by favorably influences rate cost reduction due learning. Thus, decline more rapidly experience producing higher products. Two formulations phenomenon presented. The first assumes affects direct manufacturing For formulation, optimal level is decreasing over time, but always larger than base-case level. production quantity constant if zero increasing time when positive. second formulation In case, time. behavior qualitatively similar formulation. A key feature model it resolves controversy between economic conformance Juran, which asserts one should use cost-tradeoff analysis find level, claims Deming Crosby, defects certain parameter values, policy conforms dynamics demonstrates optimality pushing towards defects.