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Cost of poor quality. Cost of poor quality (COPQ) or poor quality costs (PQC) or cost of nonquality, are costs that would disappear if systems, processes, and products were perfect. COPQ was popularized by IBM quality expert H. James Harrington in his 1987 book Poor-Quality Cost. [1] COPQ is a refinement of the concept of quality costs.
Boots theory. The Sam Vimes "Boots" theory of socioeconomic unfairness, often called simply the boots theory, is an economic theory that people in poverty have to buy cheap and subpar products that need to be replaced repeatedly, proving more expensive in the long run than more expensive items. The term was coined by English fantasy writer Sir ...
Quality costs. In process improvement efforts, quality costs tite or cost of quality (sometimes abbreviated CoQ or COQ[1]) is a means to quantify the total cost of quality -related efforts and deficiencies. It was first described by Armand V. Feigenbaum in a 1956 Harvard Business Review article.
The Taguchi loss function is graphical depiction of loss developed by the Japanese business statistician Genichi Taguchi to describe a phenomenon affecting the value of products produced by a company. Praised by Dr. W. Edwards Deming (the business guru of the 1980s American quality movement), [1] it made clear the concept that quality does not ...
Escalation of commitment. Escalation of commitment is a human behavior pattern in which an individual or group facing increasingly negative outcomes from a decision, action, or investment nevertheless continue the behavior instead of altering course. The actor maintains behaviors that are irrational, but align with previous decisions and actions.
Social exchange theory is a sociological and psychological theory that studies the social behavior in the interaction of two parties that implement a cost-benefit analysis to determine risks and benefits. The theory also involves economic relationships—the cost-benefit analysis occurs when each party has goods that the other parties value. [ 1 ]
Giffen good. In microeconomics and consumer theory, a Giffen good is a product that people consume more of as the price rises and vice versa, violating the law of demand. For ordinary goods, as the price of the good rises, the substitution effect makes consumers purchase less of it, and more of substitute goods; the income effect can either ...
e. Behavioral economics is the study of the psychological, cognitive, emotional, cultural and social factors involved in the decisions of individuals or institutions, and how these decisions deviate from those implied by classical economic theory. [1][2] Behavioral economics is primarily concerned with the bounds of rationality of economic agents.