Investing in quality under autonomous and induced learning
IIE Transactions (Institute of Industrial Engineers)
Taylor & Francis
545 - 555
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The reduction of variability in product performance characteristics is an important focus of quality improvement programs. Learning is intrinsically linked to process improvement and can assume two forms: (i) autonomous learning; and (ii) induced learning. The former is experientially-based, while the latter is a result of deliberate managerial action. Our involvement in quality and capacity planning with several major corporations in different industries suggested that it would be instructive to devise a model that would prescribe an optimal combination of autonomous and induced learning over time to maximize process improvement. We thus propose such a model to investigate the optimal quality improvement path for a company given that quality costs depend on both autonomous and induced types of learning experienced on a number of quality characteristics. Several properties of an optimal investment path are developed for this problem. For example, it is shown that decisions maximizing short-term gains may actually lead to suboptimal resource utilization decisions when total costs associated with a longer planning horizon are taken into account. Numerical examples are used to assess the sensitivity of the optimal investment plan with respect to changes in several model parameters.