Selecting Quality Initiatives to Pursue: Integrating Demand Effects into the Evaluation and Selection of Potential Quality Initiatives

Abstract

Athough the value of improving quality is well recognized, tools to help managers choose the optimal quality initiatives to pursue remain underdeveloped. In particular, while there exist well-accepted methods for estimating the cost impacts of quality initiatives, there has been less progress in developing tools to routinely estimate demand effects (e.g., revenue-related impacts) associated with potential quality initiatives. Inability to estimate such demand effects may degrade firms’ responsiveness to customers and profitability. This article draws on published literature to forward a framework for estimating a quality initiative’s value that encompasses both cost impacts and demand effects. A key component is a methodology for estimating demand effects that can be practically incorporated into firms’ routine quality initiative selection processes.

Additional information

Notes on contributors

Anthony J. Capraro

Tony Capraro (Ph.D., University of Texas) an assistant professor at the University of North Carolina at Asheville, earned his Ph.D. in Marketing in 1999 after spending 20 years in marketing and marketing management positions within the high technology sector. His research focuses on market based assets, in particular on developing the value of a firm’s customer and prospect base. His work has appeared in the Journal of the Academy of Marketing Sciences, Health Marketing Quarterly, and Corporate Reputation Review. His contact information is: Monmouth University, Department of Management and Marketing, West Long Branch, NJ 07764-1898; Tel: [phone]; Fax: [phone]; e-mail: [email protected].

Robert D. Yearout

Robert D. Yearout (Ph.D. Kansas State University) a professor at the University of North Carolina at Asheville, earned his Ph.D. in Industrial Engineering after spending 22 years in the US Army. His research focuses on statistical methods and engineering economics, in particular with regard to quality control. His work has appeared in the International Journal of Industrial Engineering Theory, Application, and Practice and in The International Journal of Industrial Ergonomics. His contact information is: The University of North Carolina Asheville, Department of Management and Accountancy, Asheville, NC 28804; Tel: [phone]; Fax: [phone]; email: [email protected].