Highest quality is lowest cost
Encyclopedia
"Highest quality is lowest cost" is a Japan
ese manufacturing
aphorism
based on the premise that the highest quality manufacturer will earn a reputation that makes buyers prefer, price being reasonably similar, to buy its goods. This means that the manufacturer will produce more than its competitors, and thus will both have economies of scale
and be able to accept a lower profit per unit—thus the highest quality goods will have a lower cost by driving other goods from the market. The production of higher quality goods can also reduce quality costs
.
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
ese manufacturing
Manufacturing
Manufacturing is the use of machines, tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale...
aphorism
Aphorism
An aphorism is an original thought, spoken or written in a laconic and memorable form.The term was first used in the Aphorisms of Hippocrates...
based on the premise that the highest quality manufacturer will earn a reputation that makes buyers prefer, price being reasonably similar, to buy its goods. This means that the manufacturer will produce more than its competitors, and thus will both have economies of scale
Economies of scale
Economies of scale, in microeconomics, refers to the cost advantages that an enterprise obtains due to expansion. There are factors that cause a producer’s average cost per unit to fall as the scale of output is increased. "Economies of scale" is a long run concept and refers to reductions in unit...
and be able to accept a lower profit per unit—thus the highest quality goods will have a lower cost by driving other goods from the market. The production of higher quality goods can also reduce quality costs
Quality costs
The concept of quality costs is a means to quantify the total cost of quality-related efforts and deficiencies. It was first described by Armand V. Feigenbaum in a 1956 Harvard Business Review article....
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See also
- Cost of poor qualityCost of poor qualityCost of poor quality or poor quality costs , are defined as costs that would disappear if systems, processes, and products were perfect....
- Gold in the mineGold in the mineGold in the mine is a metaphor for the potential savings in quality improvement efforts. It is essentially a restatement of the Pareto principle in the context of quality costs; a little digging in the right place can produce great savings, though investigating every possible opportunity is not...
- Lemon law
- Quality costsQuality costsThe concept of quality costs is a means to quantify the total cost of quality-related efforts and deficiencies. It was first described by Armand V. Feigenbaum in a 1956 Harvard Business Review article....
- The Market for LemonsThe Market for Lemons"The Market for Lemons: Quality Uncertainty and the Market Mechanism" is a 1970 paper by the economist George Akerlof. It discusses information asymmetry, which occurs when the seller knows more about a product than the buyer. A lemon is an American slang term for a car that is found to be...