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

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 fivefold: (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; (IV) considering a continuous improvement cycle to tune the model parameters, and (V) developing 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 case study is investigated in automotive parts industry in Asia.