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Evaluating Product Quality: An Application of the Taguchi Quality Loss Concept
Author(s) -
Quigley Charles,
McNamara Charles
Publication year - 1992
Publication title -
international journal of purchasing and materials management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.75
H-Index - 92
eISSN - 1745-493X
pISSN - 1055-6001
DOI - 10.1111/j.1745-493x.1992.tb00567.x
Subject(s) - taguchi methods , competitor analysis , quality (philosophy) , product (mathematics) , quality costs , value (mathematics) , business , industrial organization , operations management , marketing , economics , statistics , mathematics , activity based costing , philosophy , geometry , epistemology
This article develops a method by which quality and price differentials between competitors can be measured and used as a basis for determining the value of suppliers' products to the firm. Value pricing and the Taguchi quality loss concept are combined to provide a vehicle for calculating the total cost to the buyer associated with competing suppliers' product offerings. Based on the total cost to the buyer, a superior sourcing decision can be made.