QFD‐ and VE‐enabled target costing: a fuzzy approach

QFD‐ and VE‐enabled target costing: a fuzzy approach Globalization has provided excellent opportunities for the global manufacturing community together with a stringent barrier on cost control. Target costing has emerged as one of the main tools in aiding the manufacturers to be globally competitive. This paper analyses the effect of tools such as quality function deployment (QFD) and value engineering (VE) on target costing and explores the way in which these tools assist in achieving the target cost. The target costing model developed by Cooper and Slagmulder (Cooper, R. and Slagmulder, R., Target Costing and Value Engineering , Productivity Press, New York, NY, 1997) has been modified and tools such as QFD and VE have been incorporated in the model. Due to inherent uncertainties in the associated cost of various elements, the model has been further strengthened with the use of fuzzy logic. The theoretical model developed was implemented in an Indian auto component manufacturing company and the results were analysed. Target costing significantly relies upon QFD and VE for its effective implementation. Uncertainty in cost estimation plays a significant role in the target costing process since any variation in cost violates the cardinal rule of target costing, “the target cost should never be exceeded”. Fuzzy logic plays a vital role in accounting for uncertainty in the target costing process and gives a different perspective to arrive at the function cost. A functional approach (VE) combined with QFD backed by fuzzy approach appears to work effectively for a target costing process that is evidenced from the case study. It appears that the model developed will work satisfactorily for an industrial product and the validity of the model for fast moving consumer goods has to be ascertained. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Quality & Reliability Management Emerald Publishing

QFD‐ and VE‐enabled target costing: a fuzzy approach

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Publisher
Emerald Publishing
Copyright
Copyright © 2004 Emerald Group Publishing Limited. All rights reserved.
ISSN
0265-671X
DOI
10.1108/02656710410561817
Publisher site
See Article on Publisher Site

Abstract

Globalization has provided excellent opportunities for the global manufacturing community together with a stringent barrier on cost control. Target costing has emerged as one of the main tools in aiding the manufacturers to be globally competitive. This paper analyses the effect of tools such as quality function deployment (QFD) and value engineering (VE) on target costing and explores the way in which these tools assist in achieving the target cost. The target costing model developed by Cooper and Slagmulder (Cooper, R. and Slagmulder, R., Target Costing and Value Engineering , Productivity Press, New York, NY, 1997) has been modified and tools such as QFD and VE have been incorporated in the model. Due to inherent uncertainties in the associated cost of various elements, the model has been further strengthened with the use of fuzzy logic. The theoretical model developed was implemented in an Indian auto component manufacturing company and the results were analysed. Target costing significantly relies upon QFD and VE for its effective implementation. Uncertainty in cost estimation plays a significant role in the target costing process since any variation in cost violates the cardinal rule of target costing, “the target cost should never be exceeded”. Fuzzy logic plays a vital role in accounting for uncertainty in the target costing process and gives a different perspective to arrive at the function cost. A functional approach (VE) combined with QFD backed by fuzzy approach appears to work effectively for a target costing process that is evidenced from the case study. It appears that the model developed will work satisfactorily for an industrial product and the validity of the model for fast moving consumer goods has to be ascertained.

Journal

International Journal of Quality & Reliability ManagementEmerald Publishing

Published: Dec 1, 2004

Keywords: Target cost; Quality function deployment; Value chain; Fuzzy logic

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