(paper abridged
to 5 pages)
Ion V. Ion, Spiru Paraschiv,
Daniela Negoita, Ion C. Ionita - „Lower
Danube” University of Galati – Romania
ion.ionita@ugal.ro
Introduction. The strong connection between cost and quality
This work is conceived to show how the procedure of the compared cost-to-quality
analysis can be applied to HSVs. The work’s subject is how to solve practically
the complex problem of HSVs optimization. As we know, in mechanical engineering
to optimize means to find the best solution of one distinct quality parameter,
such as minimum weight, size, fuel consumption or maximum efficiency or comfort.
Let us notice that all of the above-enumerated features are associated to a
car (HSV) or to the service the car is doing (transport).
How about HSVs? HSVs are of course,
products, but they are manufactured and sold to deliver a service, namely
to transport people or goods. In fact all the products are bought to make
a service, the final destination of every product is to serve people someway.
Between cost and quality of every
product or service there is a strong connection, as we can see from Fig.1. Here
are plotted the costs C versus the quality Q of the goods or services. The
sloping line CQR (cost-to-quality ratio) expresses just the connection between
the two main features of any product or service, namely cost C and quality Q.
For the quality Q were drawn four usual zones: Lower, Average, Higher and
Extra. Of course, this conventional division is done for analytical purposes,
because the inter-boundaries are imaginary, in fact the transition from one to
the next category being smoothly. The focus area of the graph is the box A2,
associated to an average quality of the product or service with corresponding
cost C=2…3. In box A3 are the products made at the same average quality but
with higher cost C=3…4, reason for which they are not profitable. In box A1 are
placed the products or services of average quality, made with low costs. That’s
why these products or services are very interesting and profitable, therefore
competitive. On the left-hand side of the graph we can see the products or
services by lower quality. Box L1 represents the qualitatively inadequate products
or services, made with minimal cost C=1…2. It is true that on some markets such
products or services are abundant. Box L2 includes both qualitatively and
economically inadequate products or services. They are made with lower quality
but with relative high costs, which means that production or service delivering
like this is not profitable. On the right-hand side of the graph we can find
the products or services of superior quality. The box labeled H2 includes the
higher quality products or services, with costs C=3…4, that match their
quality. In box H3 there are higher quality products or services indeed, but
unprofitable, because they are hardly to sell, or not saleable at all. The box
H1 accounts for superior and inexpensive products or services. They are easily
saleable, and very competitive.At last, box E1 represents the most expensive
products or services, of extra quality. These are luxury products.Let’s notice
the continuous increasing of the CQR line slope. That is the quality cost,
establishment we knew before, and this is just a confirmation.
Reading Figure 1 in horizontal
direction we note the relative values of the cost C. The products made with low
costs C=1…2 are reminding us of minimum cost optimization. Here it is important
to note, however, that in the box L1 there are qualitatively inadequate
products, and that only the products or services of average quality (A1) are
competitive. We reached here the matter of our paper: the optimization of any
beneficial activity should be made not only on a cost basis, but also by
considering in the same measure the quality of the products or services. In
terms of HSV, the higher is the construction complexity of the car the more
expensive it is. But this general tendency is much influenced by the market
competition.
In the graph of Figure 1 we can notice the upper left-hand
zone, situated above CQR line, that is the unprofitable zone of goods or services.
Meanwhile, the lower right-hand side zone, situated below CQR line, represents
competitive products and services, of superior quality and made with lower
costs. To know that an HSV is profitable, the buyer has to see that his purchase
is situated as right-hand side as possible (better quality) and as low as
possible (cheaper). More about this topic can be found in reference [4].
2.Structuring the cost-to-quality ratio
Being conscious that every
payment act is done in fact in terms of cost-to-quality ratio, when analyzing
a HSV we have carefully formulate the cost-to-quality ratio of the analyzed
car. We have to do this having permanently in view how the customer will pay
that HSV. For instance, there is no sense to calculate the production of a
HSV factory in terms of [€/hour] and not having in view the real cost of what
it produces, that is the individual cost expressed in [€/HSV].
In the case of the transport
service, the final cost must be expressed in [€/km]. Here “km” means a 1 km
distance, covered by a certain HSV, characterized by the very well specified
quality parameters.
We have to end this section by
noticing that always a payment act, as result of sailing, is done in terms
of cost-to-quality ratio [€/car or €/km], never in terms of cost [€], not
related with the quality of what was paid.
3.The quality parameters of a HSV
As product a HSV must accomplish
the following quality parameters: QP01–Accessibility;
QP02–Adaptability; QP03–Availability; QP04–Cleanliness; QP05–Credibility;
QP06–Durability; QP07–Environmental Protection; QP08–Fuel
Consumption; QP09–Functional Engine
Parameters; QP10–Inflammability; QP11–Lighting Parameters; QP12–Look; QP13–Maintainability; QP14–Parking
Capacity; QP15–Productivity; QP16–Promptitude; QP17–Protection; QP18-PV
Panel Parameters; QP19-Reliability; QP20–Safety; QP21–Size; QP22–Style; QP23–Susceptibility; QP24–Pneumatic Tires Parameters; QP25–Toxicity; QP26–Transportability; QP27–Transport
Capacity; QP28–Vulnerability; QP29–Watching capacity; QP30–Weight; QP31–Workings.
As the service that HSVs must
deliver (namely transport), they have the following quality parameters: QS01–Accessibility; QS02–Accuracy; QS03–Comfort;
QS04–Competence; QS05–Confidence; QS06–Credibility;
QS07–Efficacy; QS08–Efficiency; QS09–Feedback
speed; QS10–Formalism; QS11–Honesty; QS12–Proficiency; QS13–Promptitude;
QS14–Punctuality; QS15–Safety.
In the above listed quality
parameters, the cost C of the product
or of the service is not at all mentioned. Why? Because the cost is expressing
all the efforts done to accomplish the quality requirements, it has a component
in each of the above-mentioned items.
Now,
let us propose to represent graphically the dependence cost versus quality,
according to fig.1, that is, using a two dimensional (2D) space. If we denote
by s-the number of the above mentioned quality parameters and reserve for
the cost C one dimension, that means we have to operate in the space of (s+1)
dimensions, but we know that we are not able to operate in a space with more
than 3 dimensions (3D). To draw in cost-to-quality coordinates that is in
(2D) space, we have to evaluate quality by only one value. This is possible
only if all the quality features will have the same measure unit, requirement
which is very difficult to reach. There is still a possibility, namely when
will give to each quality feature a number of points and finally will express
the quality summing all the features points. This procedure is so far arbitrary,
we will use it only if we shall not have another else better. To exceed this
difficulty we shall to remember that in fact the cost C is not a single parameter
having the measure unit [€], but it is in fact a parameter of cost-to-quality
ratio, in terms of [$/kWh], [$/kg] and so on. That means that in ordinate
axis of C we shall put not a simple amount of money [$], but a cost-to-quality
ratio C/Q that is a unitary cost of the car (€/car) or of the transport (€/km).To
this purpose all the s quality features of a product or service are divided
into two distinct categories:
-the
group of s-1 implicit demands that represent the product (car) or the service
(transport);
-one
single quality demand Q1 that differentiates cars or transports
among them ( for instance the inner individual space [cube meter/person]).
This separation
of the quality features is done in order to make comparable the single feature
Q1 of the product or service (Fig.2).To be comparable, all the
compared products or services must have the rest of (s-1) features of the
same or about same correspondent values.
4. The cost structure
The total cost of a product
cp
or of a service
cs is structured in the simplest
way, but taking into consideration the exergy origin of at least one cost component,
that of the fuel cost component
cF [€/car or €/km].
cp,s = CF + cI
+cOM [€/car or €/km]
(5)
The term cF includes
all the energy (fuel, electricity) and all the matter consumed to complete
the product or to deliver the service. The term cI
[€/car or €/km] includes all the investment expenditures done to complete
the product or to deliver the ordered service. The term cOM
[€/car or €/km] includes all the expenditures done to complete the product
or the service and which are not included in the previously formulated two
terms: cF and cI. In the operation-maintenance
cost component are included: all the employed people salaries, all the equipment
and buildings maintenance costs, taxes, fines, even the preferred foot-ball
team financial support. The components CF, CI and COM must be calculated as
cost-to-quality ratios as they are, that is, in terms of [€/car or €/km].
5. The matter of the compared cost-to-quality analysis of the HSVs
This analysis procedure
starts from the end-user demands, because he is the HSV payer. It is very
well known, that the aim of every production is to make profit. But to do
this, we have to satisfy these payer’s demands, which are the quality parameters
of the HSV for sale or of the transport service to be delivered. Never a payer
will give a cent without knowing very well the quality parameters of the bought
HSV. When we buy a HSV, we pay Euros per HSV [€/car]. Let us think that every
paid car means in fact a bunch of quality parameters defining that car.
To present more clearly the compared
cost-to-quality analysis procedure let’s presume that we studied 6 different
variants of HSV and we have calculated the corresponding cost-to-quality ratios
(the points 1-6 in Fig.3). We can see that thermo-economics [1,7,8,9] operates
along the vertical line of variable cost C and constant quality Q, while the
compared cost-to-quality analysis operates on the surface defined by variable
cost C and variable quality Q. Now to go ahead we need to remember the strong
connection between cost and quality of any product or service.
Coming back to Fig.3, we can draw
the lowering cost vector and write
the vector equation
(4)
The resultant vector is cost-to-quality
optimization vector, which is aiming to low the cost C and to increase the
quality Q. That means that if we have 6 different points 1; 2; 3; 4; 5 and
6 in the C vs. Q diagram, the points 4 and 3 are located in the unprofitable
zone, while the points 5 and 6 are placed in the competing zone. Which of
the points 5 or 6 will be chosen by the end user? It is a problem of his material
possibilities and of the wished quality. More about this the reader can find
in [11].
Nomenclature
Latin letters: C – total cost, [€/car]; cF – the energy or matter cost,
[€/car or €/km]; cI – the investment cost, [€/car or €/km]; cOM
– the operation-maintenance cost, [€/car or €/km]; cP,CS – the total cost of a product (car) and
service (km of transport) respectively, [€/car or €/km]; CQO-cost-to-quality
optimization; CQR-cost-to-quality ratio; HSV-hybrid solar vehicle; QP
–product (car) quality parameter; QS-
service (transport) quality parameter;
Greek letters:
ΔC-cost variation; ΔQ-quality variation.
Subscripts: F –energy (fuel or electricity),
consumption materials; I – investment;
OM – operation-maintenance;
P – product; S – service;
References
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14. Ionita C.I., (2004) “The
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Institutului Politehnic Iasi,Tomul L(LIV),Fasc.6C,2004,Sectia Constructii de
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15. Ion Ioniţă (2005)
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P.S. There is, also, the unabridged
work with the same title “The Compared Cost-to-Quality Analysis of HSVs”.
Its length is 10 pages and the name of document is “The compared
cost - unabridged.”
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