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• W1999405533 abstract "Common wisdom tells that, regarding quality, prevention is better than appraisal. Although scholars and practitioners concur with that, firms in practice prioritise appraisal, leading to high non-conformance quality costs. To unravel this puzzle, we understand quality as the combined result of prevention, done by the firm's back office (e.g. production), and appraisal, done by the front office (e.g. marketing). We propose a game theoretic model for which quality expenditure is an equilibrium outcome that depends on the cost of technology, the customers' sensitivity to quality, and the distribution of (variable) incentives within the firm. We conjecture those conditions for the reported quality expenditures of several companies, and calculate their optimal quality investment policy. As advocated by experts, we find that prevention should more than double appraisal, and non-conformance costs should approach zero." @default.
• W1999405533 created "2016-06-24" @default.
• W1999405533 creator A5016290943 @default.
• W1999405533 creator A5052717928 @default.
• W1999405533 date "2009-09-01" @default.
• W1999405533 modified "2023-09-26" @default.
• W1999405533 title "If prevention is better than cure, why do firms do the opposite?" @default.
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• W1999405533 doi "https://doi.org/10.1080/14783360903181578" @default.
• W1999405533 hasPublicationYear "2009" @default.
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