Model of quality costs and economic benefits of a business process of manufacturing companies

The objective of the study is to develop a mathematical model to measure quality cost and economic benefits of the implementation of the quality improvement within a business process of manufacturing companies. The economic are obtained from saving quality costs resulting from achieving operational targets. The research methodology is used; firstly, the authors developed conceptual model as a basis for a mathematical model. Secondly, they used numerical experiment to illustrate the measurement of the effect of the change of parameters’ values (e.g. number of performance indicators, and level target performance target) toward the performance target achieved, cost savings , and economic benefits. If the value of the model parameters increases, then economic benefits will increase as well, and give a shorter return period of investment. vice versa, if the value of the model parameters decreases, then the benefits will decrease as well and give a longer return period of investment. model describes the dynamics of the quality costs and economic benefits periodically from a quality improvement program.