A Novel Hybrid Approach to Analyze Cost of Quality: Balanced Scorecard and Fuzzy Logic

Abstract

In this paper, a new methodology in the area of cost of quality (COQ) is proposed to determine the optimal investment allocation to all costs. The goal is to minimize costs involved in achieving a required level of quality. The contribution of this paper is fourfold: (I) considering two types of weights for each part of COQ, in which the first type is determined by the cost volume and the second is obtained by applying a decision-making technique; (II) participating shareholders’ opinions through the balanced scorecard method; (III) presenting a mathematical programming model to maximize the investment effectiveness; and (IV) considering a continuous improvement cycle to tune the model parameters. In addition, we also develop a COQ technique in fuzzy environment to enhance the accuracy of traditional methods of employing linguistic variables. To demonstrate the applicability of the presented methodology, a numerical example is investigated.