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A Dynamic Model of Quality Cost Expenditures

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  • Sameer Prasad
  • Thomas Tyson
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    Abstract

    Traditional, single time-period models of quality cost expenditures assume static conditions and ignore the impact of the learning curve effect on a firmÕs product quality, and that of quality improvement efforts by the competitors. In this paper we incorporate both factors in a dynamic model of quality cost expenditures. The interactions not only show how firms can remain competitive, but also how they can achieve a competitive advantage. In addition, the dynamic model shows that quality learning will always lead to fewer product defects, but that total quality cost on a per unit basis will vary according to the interaction of these two factors. This model should also help managers plan, evaluate, and justify voluntary quality cost expenditures.

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    File URL: http://www.emeraldinsight.com/journals.htm?issn=1935-5181&volume=10&issue=2&articleid=1917719&show=abstract
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    Bibliographic Info

    Article provided by Emerald Group Publishing in its journal American Journal of Business.

    Volume (Year): 10 (1995)
    Issue (Month): 2 ()
    Pages: 13-18

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    Handle: RePEc:eme:ajbpps:v:10:y:1995:i:2:p:13-18

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    Related research

    Keywords: Competitive advantage; Dynamic model; Quality cost expenditures; Quality learning;

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