r
2
=2=r
2r
2
=2; 12
where:
X
n_new
= new nth factor coded level;
r = new level factor natural value;
r
+
= new high level factor value;
r
2
= new low level factor value.
The above equations will shortly be demonstrated through a case study.
Implementation. Specications and parameters were identied as having most
effect on the quality and performance of a product. If the number of the factors is two to
three, four tests are required. If the number of the factors is four to seven, eight tests are
required. If the number of the factors is eight to 15, 16 tests are required, and so on. The
number of tests required is thus twice the lowest number of factors being considered.
Furthermore, this paper describes a business performance evaluation model and
discusses how quality value model (QVM) can be used to dene the best use of
resources to meet the overall business strategy and deal with change and uncertainty
within the venture. Tables I and II use three input factors, namely, material costs (f1),
man-hours (f2), and number of sub-contractors (f3). We can utilize the intelligence and
knowledge based on past experience and experiment as input factors in QVM. The
result aims to achieve higher quality, prot and reduce schedule. The mathematical
technique in QVM calculates for any input factor changes within the project. This
enables companies to respond more quickly because of better ability to predict change
and manage decision uncertainty.
Test f1 f2 f3 Response
1
2
(a)
2
(b)
+
(c) m
2
+
(d)
2
(e)
2
(f) n
3
2
(g)
+
(h)
2
(i) o
4
+
(j)
+
(k)
+
(l) p
Table I.
The calculation of
response
Factors Minimum/low level (2) Maximum/high level (+)
Cost material 10 million 40 million
Man hours (schedule) 50 days 300 days
Number of sub-contractors 5 sub-contractors 20 sub-contractors
Table II.
Input factors
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Case study with three parameters input
If the number of any type of factor, e.g. moderating or control factor, is two to three, the
calculation of the response is described as shown in Table I.
This assumes an interrelationship between the factors which means if one changes
the others must also change. Calculation of the effect of the factors (e) is dened by:
e
0
m n o p;
e
1
2m n 2o p;
e
2
2m2n o p;
e
3
m2n 2o p:
The optimum response using equation (11) is:
Y
opt
e
0
e
1
x
1
e
2
x
2
e
3
x
3
. . . e
n
x
n
=N:
We will now enter data to examine the approach in operation.
Input. Describe value of a whole project experienced or predicted (see Table II). The
objective is to reach high quality, prot and as short a time as possible for the project
(see Table III). From Tables I-III, the optimum levels and importance of the factors can
be determined in order to see the improvement of quality, prot and time and if there
are any changes and uncertainty in the input factor in the following cases.
Objective function. Objective function 1 is to maximize prot. Calculation of the
effects of the factors is as follows:
e
0
7 4 6 2 19;
e
1
27 4 26 2 27;
e
2
27 24 6 2 23;
e
3
7 24 26 2 21:
It is used in Table IV to determine the most important factors from data above.
Experiment (test) f1 f2 f3 Prot (million) Quality (%) Time (months)
1 2 2 + 7 65 40
2 + 2 2 4 75 30
3 2 + 2 6 55 25
4 + + + 2 80 20
Table III.
Results from past
experience
Importance range Factor Effect (e) Optimum level
1 f1 27 10 million
2 f2 23 50 days
3 f3 21 5 sub-contractors
Table IV.
The most important
factors on prot
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433
Table IV shows that the most inuential factor on prot output is material costs,
followed by man-hours and the number of sub-contractors. The optimum response
using equation (11) is:
Y
opt
e
0
e
1
x
1
e
2
x
2
e
3
x
3
. . . e
n
x
n
=N;
where:
Y
opt
= prot optimization;
e = effect of the factors;
x = boundary level from Table I.
To predict the result from the test 2 and compare with the historic data (see Table III),
then:
Y
opt2
19 27x 23x 21x=4
19 271 2321 2121=4
16=4
4 million
The value of prediction is the same as the historic value in Table III, which processes
the validity of the equation.
Next we will predict the optimum level for prot that is achievable.
Y
opt
19 2721 2321 2121=4
30=4
7:5
The value of the optimum prot output level that can be achieved in this project is 7.5
million based on the assumed constraints.
Now we consider the effect of uncertainty and predict based on changed factor. If
there are any changes bringing uncertainty to the input factor, in this case the value of
factor 2 changes to 100 days, the transformation from previous value for factor 2 gives:
X
n new
r 2r
r
2
=2=r
2r
2
=2;
X 100 2300 50=2=300 250=2
275=125
20:6
Using this one gets:
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Y 19 2721 2320:6 2121=4
28:8=4
7:2
When factor 2 changes to 100 days, the prot output reduces from 7.5 million to 7.2
million. By understanding and managing the factor changes and uncertainty in
outcome, the company can predict the sum of prot that can be obtained through the
manipulation of factors. Using probability as in equations (8)-(10) we can assess design
targets a priori.
Quality. We now apply the same logic to quality (see Table I). Here quality is
measured in percentiles of customer satisfaction gleaned from market research.
Calculation of the effects of the factors is:
e
0
65 75 55 80 275;
e
1
265 75 255 80 35;
e
2
265 275 55 80 25;
e
3
65 275 255 80 15:
It is used in Table V to determine the most important factors from data above.
Table V shows that the most inuential factor on prot output is material costs,
followed by the number of sub-contractors and nally man-hours.
We will now predict the optimum level of quality:
Y
opt
275 351 2521 151=4
330=4
82:5 percent
The value of the optimum quality output level that can be achieved in this project is
82.5 percent.
We will now consider the sensibility to change and its impact on quality. If there are
any changes bringing uncertainty to the input factor, in this case the value of factor 1
changes to 20 million, the transformation from previous value for factor 1 gives:
X 20 240 10=1=40 210=1
230=30 21
Importance range Factor Effect Optimum level
1 f1 +35 40 million
2 f3 +15 20 sub-contractors
3 f2 25 50 days
Table V.
The most important
factors on quality
Quality
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435
We will now use this quality optimum equation to get:
Y 275 3521 2521 151=4
260=4
65 percent
When the changes from factor 1 change from 40 million to 20 million, the quality
output will reduce from 82.5 percent to 65 percent. This illustrates the difference
between quality and value and the relationship between product, purpose and
cost.
Time constraint. Objective function 1 is to improve time constraint. Calculation of
the effects of the factors is:
e
0
40 30 25 20 115;
e
1
240 30 225 20 215;
e
2
240 230 25 20 225;
e
3
40 230 225 20 5:
It is used in Table VI to determine the most important factors from data above.
Table VI shows that the most inuential factor on prot output is man-hours,
followed by material costs and the number of sub-contractors.
We will now predict the optimum level of time:
Y
opt
115 1521 2521 251=4
70=4
17:5
The value of the optimum time output level that can be achieved in this project is 17.5
months.
We will now consider the sensibility to change and its impact on time. If there are
any changes bringing uncertainty to the input factor, in this case the value of factor 3
changes to ten sub-contractors, the transformation from previous value for factor 3
gives:
X 10 220 5=3=20 25=3
1:66=5
20:332
Importance range Factor Effect Optimum level
1 f2 +25 300 days
2 f1 +15 40 million
3 f3 25 5 sub-contractors
Table VI.
The most important
factors on quality
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We will now use this time optimum equation to get:
Y 115 1521 2521 250:332=4
73:35=4
18:33
When the changes from factor 3 change from20 sub-contractors to ten sub-contractors,
the time schedule output will change to 18.33 months.
Conclusion
The QVM in this paper is offered as a means to help a company to face the
globalization and one world community. QVM produces a synergy between technology
and behavioral issues and human innovation that is necessary to compete and survive
in the challenging global marketplace of the new world. The optimization of intangible
assets, such as in-house knowledge are the why and how the company makes
progress towards high quality. The basic idea for a mathematical approach to an
optimal design is to increase all of the products strength factors and at the same time
minimize all its weaknesses. Furthermore, the mathematical technique in QVM also
calculates for any input factor changes within the project. This enables companies to
be more responsive and predictable in respect to change and the management of
decision uncertainty. Once having set up the model it becomes a routine simplex
process to establish the optimal levels in individual qualities to maximize the quality.
Therefore, the concept of QVM has arisen to ensure that companies can plan their
quality improvement, anticipate their rivals development plan and nally develop
competitive advantage by better knowledge management.
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