2009 Fifth International Conference on Natural Computation

The Study of Quality Costs Optimization Based on Particle Swarm Optimization

Algorithm and Strategic Coordination

Zhengyuan Jia, Lihua Gong

School of Business Administration
North China Electric Power University
Baoding, China
E-mail: jackgong83@163.com

Abstract—The optimization of the quality costs is the
important content of quality management. In this paper, we
studied the relationship between the quality level and the
quality costs, and we found that the traditional curve of quality
costs only concerned about the relationship of the internal
factors of quality costs, and neglected the external factors of
the quality costs which decide the entire costs of quality. We
had proposed a framework for addressing the optimal COQ
(cost of quality) within the context of strategic coordination.
And then we developed the quality costs model based on
strategic coordination. We described an operation mechanism
about how the strategic objective decides quality costs through
intermediate variable ‘customer satisfaction’. Besides we
developed a new mathematics model of quality costs
optimization, and adopted the PSO (Particle Swarm
Optimization) algorithm to get the solution. The example
showed that the method is rational and effective.
Keywords-quality costs optimization; particle swarm
optimization; strategic coordination
with the existing corporate cost structures. [2] In this paper,
we studied the relationship between the quality control and
the cost, and we have proposed a framework for addressing
the optimal COQ within the context of strategic
coordination. We described an operation mechanism about
how the strategic objective decides quality costs through
intermediate variable ‘customer satisfaction’. Besides we
developed a new mathematics model of quality costs
optimization, and adopted the PSO algorithm to get the
solution. The example showed that the method overcomes
those shortages and is rational and effective.
II. THE MODEL OF QUALITY COSTS BASED ON STRATEGIC
COORDINATION
A. The general cost of quality model

I. INTRODUCTION
In the 21st century, the quality has become an important
means to enhance the competitiveness of enterprises. It
played an important role in improving the profitability and
market share. As a result, the research on the model of
quality costs and the quality costs optimization is of great
significance. COQ (cost of quality) means any cost that is
spent to achieve the product quality. Joseph Juran is widely
credited with making the earliest references to losses due to
poor quality of products and services. His broad-based,
general application of a COQ philosophy represented a
considerable expansion of the existing body of knowledge
when first introduced in 1951. Since that time many
significant contributions have been made by a number of
prominent authors. Juran, along with Armand Feigenbaum,
was primarily responsible for the writings that led to the
development of the current COQ concepts and models. [1]
Many economic and mathematical models and theories have
been developed and proposed to address the nature and
significance of the COQ. However, these models have been
of little use to the people they were ultimately intended to
help: mainly the quality professionals and business
managers. The reasons for this lack of utility include an
extensive mathematical complexity, a lack of documentation
to accompany the analytical derivation, and incompatibility
Figure 1. The general cost of quality models
The traditional model of optimum quality costs, which is
presented in Fig.1, is representative of the ideas and
philosophies that were prevalent until recent years regarding
COQ. This process model presents three different cost
functions: prevention and appraisal costs, failure costs, and
total quality costs. Several important points should be raised
regarding the underlying assumptions of this model. First,
the slope and direction of the prevention and appraisal costs
curve implies that no amount of prevention and appraisal,
regardless of scope and magnitude, can deliver an end-
product that is 100% conforming. Second, the slope and
direction of the failure costs curve suggests that as more
failures are incurred and fewer good units are produced, the
COQ raises dramatically. Third, the total quality costs curve,

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DOI 10.1109/ICNC.2009.53
which includes the sum of the first two functions, implies
that the optimal COQ point is located at a position that is less
than 100%of quality conformance. Finally, the model also
implies that there exists a trade-off between prevention
appraisal costs and failure costs. [3] The traditional model
only concerned about the relationship between prevention
appraisal costs and the cost of failure, and neglected the
impact of enterprises’ external environment or enterprises’
strategy on the quality management. The quality
management is an entire system whose optimization is
decided by the outside force strategic objective. The decision
of quality costs must obey the strategic objective, which is
the precondition of the optimization of quality costs.
B. The cost of quality model based on strategic
coordination
Figure 2. The cost of quality model based on strategic coordination
The cost of quality model based on strategic coordination
is shown in figure2. Traditional quality cost-curve will
produce movement under guidance of the strategic
objectives. That is, strategic objective decides the position of
the cost curve. We suggest that the strategic analysis
framework of this model should include the following 7
elements: process management, leadership, strategic
planning, customer and market information analysis, human
resource development, performance. The conceptual
framework proposed in this study suggests that each of these
factors can be systematically evaluated in terms of their
impact on the optimum cost quality.
III. THE OPTIMIZATION MODEL OF COQ
A. The operation mechanism of quality costs based on
strategic coordination
Figure 3. The operation mechanism of strategic objective to COQ
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In this paper, we studied the optimization problem of
COQ from the view of strategic coordination. The
optimization decision for COQ must meet the requirement of
strategic objective. The operation mechanism of strategic
objective to COQ is shown in figure 3. First, strategic
objective determines customer satisfaction, and then
customer satisfaction determines the level of quality (quality
reliability). At the same time, the optimal COQ supports the
objectives of corporate strategy. Under a certain level of
quality, we can determine the optimal quality costs with
optimization model of COQ. In practice, we suggest that
strategy experts or enterprise’s strategic committee assess the
7 influential factors of strategy and determine corresponding
customer satisfaction. And then experts of quality determine
the level of quality through calculating history data. Through
the optimization model solution, we can obtain the optimal
quality costs.
B. Develop the mathematic model of quality costs
optimization
In order to facilitate the quantitative control of the quality
management, this paper introduced the concept of quality
reliability. We measured the capability of meeting quality
requirement in life cycle of products with quality reliability.
The life cycle of product is divided into a lot of processes,
such as market research, product development and design,
preparation process, supply procurement, resource allocation,
manufacturing, testing, marketing, services and so on. Any
process will impact the quality of products. When the quality
reliability of every process is high, the quality of product will
be prefect. We used R to measure the quality reliability.
Because there are n processes in the life cycle that is
independent for each other, reliability of quality management
is a series-wound system. So the formula is:
n
R = ∏ Ri (1)
i =1
Where ‘R’ is the quality reliability of the whole system;
Ri is the quality reliability of the ith process. Because the
reliability of quality management is a series-wound system,
we can obtain the optimization model of COQ based on the
series theory. The model is as follows:
n
y = min ¦ Qi (2)
i =1
n
s.t Rs = ∏Ri =1
i (3)
( R1 , R2 , R 3 ,..., Ri ) > R (4)
0 < Ri ≤ 1 (5)
Where ‘Q’ is the function about Ri; Qi is the costs of
the ith sub-systems when the reliability of the ith process is
Ri; Ri is the reliability of the ith sub-systems; R is the
reliability of the whole system. Rs is the reliability which is
decided by analysis of strategy. We can obtain the following
formulas according to the model of optimal quality costs updated by the particle’s own experience and the experience
which is proposed by Joseph Juran. of the particle’s neighbors or the experience of the whole
Qi = Qi (1) + Qi (2) (6) swarm. A particle’s status on the search space is
characterized by two factors: its position and velocity. The
R R position and velocity of the ith particle in the d-dimensional
Qi = a1 × e i × k1 + a2 × e i × k2 (7)
1 − Ri 1 − Ri search space can be represented as X i = ( xi1, xi 2 , xi3 " xiD )
According to the above-mentioned mathematics model, and Vi = (vi1, vi 2 , vi3 " viD ) , respectively. Each particle has
we can extend it to a new mathematics model.
n its own best Pi = ( pi1 , pi 2 , pi 3 " piD )
position
R R
y = min ¦ ( a1 × e i × k1 + a2 × e i × k2 ) (8) corresponding to the personal best objective value obtained
i =1 1 − Ri 1 − Ri so far at time k. The global best particle is denoted
n by Pg = ( p , p , p " p gD ) , which represents the best
s.t Rs = ∏R
i =1
i (9)
g1 g2 g3
particle found so far at time k. The new velocity of each
particle is calculated as follows:
( R1 , R2 , R 3 ,..., Ri ) > R (10)
0 < Ri ≤ 1 (11) vidk +1 = wvidk + c1r1 *( pid − xidk ) + c2 r2 *( pgd − xidk ) (14)
Where Qi is the total cost of the ith process; Qi (1) is Where c1 and c2 are constants called acceleration
coefficients, w is called the inertia weight factor, r1 and r2
the prevention and appraisal costs of the ith process;
are two independent random numbers uniformly distributed
Qi (2) is the failure costs of the ith process; a1, a2, k2, k1 in the range of [0, 1]. Thus, the position of each particle is
are the coefficients of the model. updated in each generation according to the following
According to the literature [4], we can obtain the equation:
function which describes the relationship between
prevention and appraisal costs and reliability of the quality. xidk +1 = xidk + vidk +1 1 ≤ i ≤ n;1 ≤ d ≤ D (15)
R
k1
C1 ( R) = a1e1− R (12) Generally, the value of each component in vid by (14)

Where C1 ( R ) is the prevention and appraisal costs; a1 ,
k1 are coefficients.
The function of failure costs and reliability of the quality
is as follows:
1− R
k2
C2 ( R ) = a 2 e R
(13)
Where C2 ( R ) is the failure costs of quality; a2 , k 2 are
coefficients.
Measurement experts assessed all aspects of the system's
reliability, and then calculated the maximum and minimum
value of R, as well as the prevention and appraisal costs (P1,
P2) and the failure costs (P3, P4). After that, we will get the
coefficients a1 , k1 , a2 , k 2 through solving equations. [4-6]
C. Solve the model by PSO algorithm
1) Introduce the PSO ˖ Particle Swarm Optimization
(PSO), an evolutionary computation technique firstly
introduced by Kennedy and Eberhart in 1995, is an
optimization algorithm based on swarm theory. By imitating
the behaviors of biome, it is highly fit for parallel
calculation, and has perfect performance on large-scale
optimization problems. The main idea of PSO is to model
the flocking of birds flying around a peak in a landscape. In
PSO the birds are substituted by particles and the peak in
the landscape is the peak of a fitness function. The particles
are flying through the search space with a velocity forming
flocks around peaks of fitness functions, which is constantly
can be clamped to the range [−Vmax , Vmax ] to control
d d
excessive roaming of particles outside the search space.
Then the particle flies toward a new position according to
(15). This process is repeated until a user-defined stopping
criterion is reached. [7]
2) Code for particle: In order to use the PSO algorithm,
we must code for the solution of the problem firstly. We can
simply use the sequence of the numbers between 0~1 to
present a potential solution. Assume the position vector of
the ith particle is X i = {x , x ,...xin } . xij is the reliability
i1 i 2
of the jth process. vij is the speed of the ith particle which
is corresponding to the particles’ location vector. We took
the quality costs allocation problem of 10 processes for
example. The outcome of one particle’s position vector is =
{0.90ˈ0.91ˈ0.91ˈ0.93ˈ0.93ˈ0.95ˈ0.96ˈ0.97ˈ0.99
ˈ0.98}. The optimal solution of the quality costs is that the
reliability of the first process is 0.90; the reliability of the
second process is 0.91; …; the reliability of the last process
is 0.98.
3) Solving program of the model ˖ The process of
COQPSO is developed with the optimization method
described in literature [7] as the reference; this paper
designs the process of the COQPSO for COQ optimization,
which is described as follows:
Step 1: input the lowest and highest value of the
reliability (R1, Rm) and quality assurance costs (P1, P2),

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and the lowest and highest value of quality failure costs (P3,
P4) according to the model,
Step 2: according to the initialization of the R1, Rm, P1,
P2, P3, P4, we would calculate the coefficient a1 ˈ k1 ˈ
a2 ˈ k 2 and at the same time initialize the population. Set
the parameters of PSO, such as: population size N, particle
position X i , velocity vi .
Step 3: Calculate the fitness through the objective
function, and make the particle swarm to meet the
constraints conditions.
Step 4: Update the speed vi and position xi of every
particle with the gBest and pBest based on the rule of PSO.
Step 5: If it meets the suspension conditions, the circle
stops; otherwise it returns to Step3.
Step 6: Get the minimum cost of quality through
objective function after the termination conditions, and get
the reliability of the system.
IV. THE EXAMPLE OF APPLICATION
A company produces electronic components. According
to the life cycle of their products, the company put the
processes into 10 parts such as market research\product
development\ design\ preparation process\ supply
procurement\resource allocation\ manufacturing\ testing\
marketing\ production services. The company adopted the
Low-cost strategy and the strategy required active cost
reduction. The company's strategy committee assessed the
strategy and determined the customer satisfaction should be
90%. And then quality management experts determined the
level of quality through the analysis of his historical data.
The level should be 96.64%. So we can get that Rs =0.9664.
Then measurement experts assessed all aspects of the
system's reliability, and then calculated the maximum and
minimum value of R, as well as the prevention appraisal
costs (P1, P2) and the failure costs (P3, P4). After that, we
will get the coefficients a1 , k1 , a2 , k 2 through solving
equations. The coefficients of every process are shown in
table 1.
TABLE I. THE COEFFICIENTS OF EVERY PROCESS
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In this paper, we used Matlab7.0 to simulate the
optimization model of COQ based on strategic coordination.
In order to prove the efficiency of the model this paper used
the matlab 7.0 to make a simulation. Based on a large
number of experiments, the particles’ optimum parameters
are as followings: the number of particles is equal to 80; the
swarm is divided into ring topology; Neighboring subgroup
size is 4; w =0.94, w =0.13, c = c =1.28, Smax =800.
int end 1 2
We can get a satisfactory result with the algorithm which has
been validated by experiment many times. The optimal
solution is X i = {0.989, 0.998, 0.998, 0.999, 0.996, 0.995,
0.996, 0.997, 0.999, 0.998}. So the optimal quality reliability
of the entire system is 0.9664, and the quality reliability of
the first process is 0.989……the quality reliability of the last
process is 0.998. At this context the optimal cost based on
strategic coordination is 1’856’300 Yuan. The results are
reasonable and show that the PSO algorithm can be used to
get the solution of the optimization model of COQ based on
strategic coordination.
V. CONCLUSION
This article explored a new method of optimization of
COQ. We considered the important factors (strategic
objectives) which have a great impact on the optimization of
COQ, and amended the traditional cost-quality curve, and
then we introduced the concept of quality reliability to
measure quantitatively the management of quality. The
article developed an optimization model based on the
strategic coordination, and adopted the POS algorithm to get
the solution of the mathematical model. After simulation of
the example, it had been proved that the optimization model
of COQ based on strategic coordination is a valuable and
practical method. But there are still some problems about this
method. How to determine the customer satisfaction
precisely will be further studied.
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