UNQUALITY-COSTING SAMPLING PLANS BY VARIABLES AND THEIR IMPLICATIONS ON SUPPLY RELATIONSHIPS

This paper presents a simple yet effective approach for unquality-cost ing in an outsourcing/subcontracting environment. It first presents so me of the usual approaches for defining supply relations based on cost -quality issues and then introduces our proposed unquality-costing sam pling plans by variables. The approach is derived from the Taguchi los s-function model. A simple sampling Table is presented for the case of symmetric quadratic loss-functions and an illustrative example of its application in a practical setting is then presented, The last Sectio n of the paper finally discusses the advantages and disadvantages resu lting from its generalized application to outsourcing and subcontracti ng within a network manufacturing environment.