A Simulation Approach for Establishing Limits on Quality Expenditures

This article proposes a methodology for quantitatively specifying the hidden cost of quality in a dry goods distribution warehouse. Determining this cost is particularly important in manual paced environments since it is difficult to estimate the potential savings of quality improvements. We develop a simulation approach for predicting the manpower requirements as a function of a percentage error function. This method will quantitatively set a maximum expenditure limit for any proposed quality improvement effort. The methodology could also be adapted to any other flexible manual paced operation using autonomous operators.