Principles of evaluating quality investments

Principles of evaluating quality investments

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Article ID: iaor200970498
Country: United Kingdom
Volume: 24
Issue: 5
Start Page Number: 533
End Page Number: 542
Publication Date: Aug 2008
Journal: Quality and Reliability International
Authors:
Keywords: measurement, investment
Abstract:

Quality departments often experience difficulties selling the idea that first priority should be given to quality improvement. Most approaches to project budgeting favour traditional investments such as new product development, which are perceived as potential profit boosters. To compete with such investments, a clear economic logic is needed, which stresses the long‐term benefits of better quality. The aim of this paper, therefore, is to provide a concise framework of how to think about quality investments in economic terms. By focusing on the principles of an economic evaluation, it highlights the major aspects of an improvement assessment and derives a simple measure for helping practitioners to determine the advantageousness of a quality initiative.

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