Investment In Quality Improvement Research Articles

Supply chain model with variable lead time under credit policy

The success of the Japanese in the employment of just-in-time (JIT) production has received a great deal of attention in the past two decades. The underlying goal of JIT is to eliminate wastes, which can be achieved through various efforts such as shortening lead time and improving quality. The objective of this study is to extend the model of Huang et al. (Eur J Oper Res 202:473–478, 2010) by allowing deterministic variable lead time and quality improvement investment on an integrated inventory model. That is, this article develops an integrated inventory model which jointly determines the optimal order quantity, process quality, lead time, and the frequency of deliveries simultaneously. Furthermore, a solution procedure is suggested for solving the proposed model, and numerical examples are given to illustrate the benefit of coordination between vendor and buyer.

Real options as an incentive scheme for managing revenues in transportation infrastructure projects

Revenue management for transportation infrastructure projects is challenging due to the huge amount of capital involved and the deep uncertainty inherent in long service lifetimes. Public–private partnerships (PPPs) provide a way for the public sector to acquire financial resources and transfer risks in such projects. This paper proposes a real options (ROs) incentive to improve revenue management for PPPs. In addition to the initial concession, the public sector offers an RO incentive to the private sector at a premium. Designed in an option game framework, the RO incentive captures the behaviour dynamics of option owner and writer, thus producing an optimal strategy for revenue management that cannot be derived from the standard RO valuation. The RO incentive stimulates the private sector to increase its investment in quality improvement, makes a short concession attractive to the private sector and allows both parties to better manage revenues under high uncertainty.

The business case for the reduction of surgical complications in VA hospitals

Surgical complications contribute substantially to costs. Most important, surgical complications contribute to morbidity and mortality, and some may be preventable. This study estimates costs of specific surgical complications for patients undergoing general surgery in VA hospitals using merged data from the VA Surgical Quality Improvement Program and VA Decision Support System. Costs associated with 19 potentially preventable complications within 6 broader categories were estimated using generalized, linear mixed regression models to control for patient-level determinants of costs (eg, type of operation, demographics, comorbidity, severity) and hospital-level variation in costs. Costs included costs of the index hospitalization and subsequent 30-day readmissions. In 14,639 patients undergoing general surgical procedures from 10/2005 through 9/2006, 20% of patients developed postoperative surgical complications. The presence of any complication significantly increased unadjusted costs nearly 3-fold ($61,083 vs $22,000), with the largest cost differential attributed to respiratory complications. Patients who developed complications had several markers for greater preoperative severity, including increased age and a lesser presurgery functional health status. After controlling for differences in patient severity, costs for patients with any complication were 1.89 times greater compared to costs for patients with no complications (P < .0001). Within major complication categories, adjusted costs were significantly greater for patients with respiratory, cardiac, central nervous system, urinary, wound, or other complications. Surgical complications contribute markedly to costs of inpatient operations. Investment in quality improvement that decreases the incidence of surgical complications could decrease costs.

Ethnic Differences in Diabetes Management in Patients With and Without Comorbid Medical Conditions

OBJECTIVETo examine ethnic disparities in diabetes management among patients with and without comorbid medical conditions after a period of sustained investment in quality improvement in the U.K.RESEARCH DESIGN AND METHODSThis cross-sectional study examined associations between ethnicity, comorbidity, and intermediate outcomes for mean A1C, total cholesterol, and blood pressure levels in 6,690 diabetes patients in South West London.RESULTSThe presence of ≥2 cardiovascular comorbidities was associated with similar blood pressure control among white and South Asian patients when compared with whites without comorbidity but with worse blood pressure control among black patients, with a mean difference in systolic blood pressure of +1.5, +1.4, and +6.2 mmHg, respectively.CONCLUSIONSDespite major reforms to improve quality, disparities in blood pressure management have persisted in the U.K., particularly among patients with cardiovascular comorbidities. Policy makers should consider the potential impacts of quality initiatives on high-risk groups.

Performing Well on Nursing Home Report Cards: Does It Pay Off?

To examine whether high performance or improvement on quality measures leads to economic rewards for nursing homes in the presence of public reporting. Data from 6,286 freestanding Medicare-certified nursing homes between 1999 and 2005 were identified in Medicare Cost Reports, Minimum Data Set, and Online Survey and Certification Reporting System. Using a facility-level fixed-effects model, the effect of public reporting on financial performance was measured by comparing each of four financial outcomes (revenues, expenses, operating, and total profit margins) before (1999-2002) to after (2003-2005) public reporting was initiated. The effects were estimated separately by level of performance and improvement over time. Facilities that improved on publicly reported performance had increased revenues and higher profit margins after public reporting, mainly through increased Medicare admissions. High-scoring facilities showed similar patterns, though differences were not statistically significant. Providers that improve their performance under public reporting may receive a return on their investment in quality improvement. This supports the business case for public reporting.

Production system with process quality control: modelling and application

Over the past decade, there has been a great deal of research dedicated to the study of quality and the economics of production. In this article, we develop a dynamic model which is based on the hypothesis of a traditional economic production quantity model. Taguchi's cost of poor quality is used to evaluate the cost of poor quality in the dynamic production system. A practical case from the automotive industry, which uses the Six-sigma DMAIC methodology, is discussed to verify the proposed model. This study shows that there is an optimal value of quality investment to make the production system reach a reasonable quality level and minimise the production cost. Based on our model, the management can adjust its investment in quality improvement to generate considerable financial return.

Quality improvement in community health centres: the role of microsystem characteristics in the implementation of a diabetes prevention initiative

ObjectivesTo examine the role of microsystem characteristics in the translation of an evidence-based intervention (the Diabetes Prevention Initiative (DPI)) into practice in a community-health centre (CHC).DesignCase study.AnalysisConstant comparative method of...

Covering the Uninsured as a Quality Improvement Strategy

Covering the Uninsured as a Quality Improvement Strategy

Investment in quality improvement: how to maximize the return

Today, one of the most pressing concerns of health-care policymakers in industrialized countries are deficits in the quality of health care. This paper presents a decision program that addresses the question in which disease areas and at what intensity to invest in quality improvement (QI) in order to maximize population health. The decision program considers both a budget constraint as well as time constraints of educators and health professionals to participate in educational activities. The calculations of the model are based on a single assumption which is that more intense quality efforts lead to larger QIs, but with diminishing returns. This assumption has been validated by previous studies. All other relationships described by the model are deduced from this assumption. The model uses data from QI trials published in the literature. Thus, it is able to assess how the vast number of published QI strategies compare in terms of their value.

The value of setup cost reduction and quality improvement on the optimal production run length and inspection schedules in a deteriorating production process

This paper presents an economic production quantity model taking into consideration of 1) investment in setup cost reduction; 2) investment in quality improvement; 3) investment in both setup cost reduction and quality improvement, to determine simultaneously optimal production run length and inspection schedules in a deteriorating production process. A simple and accurate algorithm is presented to locate the optimal production run length and then to find the optimal setup cost and optimal process quality simultaneously. A numerical experiment is carried out to compare the results of: 1) number of inspection schedules; 2) optimal production run length; 3) average cost per unit time of the proposed model to an existing model without considering the setup cost reduction and quality improvement. The results show that investment in setup cost reduction will result in reduction in primarily the optimal production run length means small lot size, while the investment in quality improvement results in number of inspections undertaken to be unity during each production run. The results show that investments in setup cost reduction and process quality improvements of a production process achieve some of the characteristics of JIT system such as small lot sizes and high quality.

A JIT integrated inventory model for a buyer and a vendor considering the impact of quality improvement

This paper investigates the effect of quality improvement using the integrated vendor?buyer inventory model of Banerjee and Kim (1995). The quality improvement investment (Yang and Pan, 2004) is explored under the conditions of buyer and vendor quality improvement efforts (Zhu et al., 2007). The integrated joint optimal policy for buyer?vendor yields minimum total cost when compared with independent buyer?vendor optimal policies. Buyer integration with high-quality vendor is preferred owing to lower total costs. Constraints on the quality improvement yield a higher Total Relevant Cost (TRC) for buyer and vendor coordination.

The nature of the service quality and satisfaction relationship

PurposeThe aim of this paper is to challenge the assumption that the relationship between service quality attributes and customer satisfaction follows a classic linear path. It suggests the existence of a threshold level after which the strength of the relationship between the two constructs, for some service attributes, adjusts. Depending on the type of adjustment, service attributes can be classified as satisfier or dissatisfier. Each requires a distinct managerial action.Design/methodology/approachThe data were collected via self‐administered questionnaire from customers of three service industries (i.e. banking service, hairdresser service, phone service). The type of impact of nine individual service quality attributes on customer satisfaction was investigated using multiple regression models with interaction terms.FindingsThe empirical findings provide evidence for the existence of satisfiers and dissatisfiers. Satisfiers exhibit initially no relationship with satisfaction, but after the acceptable level of quality (i.e. inflection point) has been reached, become positively related. Dissatisfiers follow initially a positive relationship path with satisfaction but after the inflection point exhibit no relationship, or at best a significantly weakened one, with satisfaction. The relationship patterns were found to be service attribute as well as service type dependent.Originality/valueThe findings suggest that, for dissatisfiers, increasing service quality ad infinitum may not be the most prudent approach. Here, gains in satisfaction can no longer be achieved after the acceptable quality level has been reached. However, for satisfiers, service firms must leap over the threshold before gains in satisfaction can be realized. This may require large investments in quality improvements.

Choosing between Different Forms of B2B Electronic Marketplaces

In this paper we take into account the main features of public and private B2B e-marketplaces and we analyze the choice of a firm, among the two forms of e-marketplaces in the presence of competition from rival firms as well as in the presence of investments in quality improvement. We provide conditions under which both forms of B2B e-marketplaces arise in equilibrium as well as conditions under which public B2B e-marketplaces prevail. Furthemore, we demonstrate the crucial role of product differentiation and of the efficiency of buyer-supplier coordination in the firm's choice. Finally, we point out the differences between the private and the social incentives regarding the choice of the optimal B2B e-marketplace form.

Managing quality improvement, setup cost and lead time reductions in a just-in-time integrated inventory model

This article investigates a just-in-time integrated inventory model with quality improvement, setup cost and lead time reduction. The objective is to simultaneously optimise the order quantity, setup cost, process quality level, number of deliveries and lead time. A solution procedure is suggested for solving the proposed model and a numerical example is considered to illustrate the impact of setup cost reduction with capital investment. The current model predicts a lower total cost, order quantity and number of deliveries compared with Yang, J-S. and Pan, J.C-H. (2004) 'Just-in-time purchasing: an integrated inventory model involving deterministic variable lead time and quality improvement investment', Int. J. Production Research, Vol. 42, pp.853-863. An integrated inventory model is helpful in breaking down the traditional barriers as it results in lower total relevant cost compared to the independent inventory policies of both purchaser and vendor. These results can be used to promote cooperation and to minimise the total system cost of integrated enterprises.

A note on “quality improvement and setup reduction in the joint economic lot size model”

In a recent paper, Affisco et al. [J.F. Affisco, M.J. Paknejad, F. Nasri, Quality improvement and setup reduction in the joint economic lot size model, European Journal of Operations Research 142 (2002) 497–508] propose a quality-adjusted joint economic lot size model that considers investments in quality improvement and setup cost reduction. In particular, they consider a single-vendor, single-buyer, deterministic demand economic lot-sizing problem, and they investigate the potential impact of economic investments in the vendor’s quality improvement and setup cost reduction efforts on the system-wide costs. However, the particular form of the investment function that they use to represent the cost of investments in quality improvement does not represent actual practice in many industries. Hence, in this note, we develop modified models for quality improvement and simultaneous quality improvement and setup cost reduction using a modified form of the investment function. Our fundamental results and conclusions are substantially different than those in Affisco et al. (2002).

The impact of total quality service age on quality and operational performance: an empirical study

PurposeThe purpose of this paper is to show that a popular conception among the practitioners is that Total Quality Service (TQS) has a long‐range perspective and the organizations that have adopted TQS could be able to see the results of their quality improvement initiatives only after a long duration. Hence firms that have been practicing TQS are interested to know the time duration before which they can get back the returns on investments in quality improvement programmes.Design/methodology/approachThe present study attempts to empirically investigate the impact of TQS age on quality and operational performance. In order to examine the impact of TQS age on the different dimensions of TQS, out of the 12 critical dimensions of TQS, the two outcome constructs, namely Customer Focus and Satisfaction and Employee Satisfaction, have been considered for measuring quality performance while the other ten dimensions have been considered for measuring operational performance.FindingsThe results imply that the firms can get back their returns on investments in their quality management initiatives within three years of TQS implementation. The ways, commitment and the competence with which the TQS implementation is carried out are more important rather than the duration of TQS implementation. Further, among the successful firms, it has been observed that as TQS age increases, quality and operational performance also increases, since firms get more and more experienced in effective implementation of TQS in a continuously improving environment.Originality/valueThe impact of TQS age on quality and operational performance has been investigated in a developing economy with respect to the automobile service industry. Primarily this is a research paper and the results and findings will be of immense use to the business executives of service firms.

An integrated vendor–buyer inventory model with quality improvement and lead time reduction

The success of the Japanese in the employment of just-in-time (JIT) production has received a great deal of attention in the past two decades. The underlying goal of JIT is to eliminate wastes, which can be achieved through various efforts such as shortening lead time and improving quality. Recently, Yang and Pan [2004. Just-in-time purchasing: an integrated inventory model involving deterministic variable lead time and quality improvement investment. International Journal of Production Research 42(5), 853–863] have studied the effects of lead time reduction and quality improvement investment on an integrated inventory model. The objective of this study is to extend Yang and Pan's (2004) model by allowing for shortages and using the reorder point as a decision variable. That is, this article develops an integrated inventory model which jointly determines the optimal order quantity, reorder point, process quality, lead time and the frequency of deliveries simultaneously. Analytical results that characterize the exact, optimal policy for the problem described above are devised to develop efficient and optimal computational procedures. Furthermore, a numerical example is given to illustrate the results.

Enhancing the Potential of Quality Improvement Organizations To Improve Quality of Care

The Centers for Medicare & Medicaid Services (CMS) is responsible for improving the quality of care for the nation's Medicare beneficiaries. A key component of this responsibility is the Quality Im...

The value of setup cost reduction and process improvement for the economic production quantity model with defects

This paper investigates the effect of imperfect yield on economic production quantity decisions. The production system is assumed to produce some time-varying proportion of defective parts which can be repaired at some unit cost. For a general defect rate function, we develop results that characterize the optimal run length and expected total cost and how these objects are affected by the cost parameters. Two kinds of investments in process improvements are considered: (i) reducing setup costs and (ii) improving process quality. We develop expressions for the marginal value of both setup cost reduction and process improvement and discuss the relationship between these marginal values and problem cost parameters. We show that any investment in setup cost reduction will result in a reduction in the number of defects produced, and the total number of defects can increase or decrease with an investment in quality improvement.

Implementing Six Sigma in The Netherlands

Six Sigma, a process-focused strategy and methodology for business improvement, can be used to improve care processes, eliminate waste, reduce costs, and enhance patient satisfaction. Six Sigma was introduced in 2001 at the 384-bed Red Cross Hospital (Beverwijk). During the Green Belt training, every participant was required to participate in at least one Six Sigma project. The hospital's total savings in 2004 amounted to 1.4 million dollars, for an average savings of 67,000 dollars for each of the completed 21 projects. In one project, the team designed a new admission process for the operating rooms, resulting in an average starting time nine minutes earlier. This relatively minor improvement made it possible to operate on an additional 400 patients a year and to achieve a net savings of >273,000 dollars. A second project reduced the number of patients receiving intravenous (IV) antibiotics by switching to oral administration, yielding annual savings, based on medication costs alone, of >75,000 dollars. A third project reduced the length of stay in the delivery room from 11.9 to 3.4 hours, yielding an annual savings of 68,000 dollars. The "Ultimate Cure?": Six Sigma, which entails involvement of health care workers; use of improvement tools (from industry); creation of trained project teams to tackle complex, often cross-departmental processes; data analyses; and investment in quality improvement may prove the "ultimate cure" to the current cost, quality, and safety issues that challenge health care.