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

In this paper, a new methodology in the area of cost of quality (COQ) is proposed to determine theoptimal investment allocation to all costs. The goal is to minimize costs involved in achieving arequired level of quality. The contribution of this paper is fivefold: (I) considering two types of weightsfor each part of COQ, in which the first type is determined by the cost volume and the second isobtained by applying a decision-making technique; (II) participating shareholders’ opinions throughthe balanced scorecard method; (III) presenting a mathematical programming model to maximize theinvestment effectiveness; (IV) considering a continuous improvement cycle to tune the modelparameters, and (V) developing COQ technique in fuzzy environment to enhance the accuracy oftraditional methods of employing linguistic variables. To demonstrate the applicability of the presentedmethodology, a case study is investigated in automotive parts industry in Asia

Keywords:

Cost of Quality , Fuzzy LogicBalanced ScorecardOptimizationContinuous Improvement