Abstract

The aim of this study is to analyze the relationship between quality cost and sales revenue so that to give some guidance to managers and researchers. By establishing system dynamics model which is realized by the Venism, the paper analyzes the relationship between quality cost and sales revenue. The paper proves the relationship that with the enhancement in the quality level, the prevention and appraisal cost increases and with the increase in prevention and appraisal cost, the failure cost decreases. By the SD model, the paper proves that the quality cost has direct influence on the sales revenue of the enterprises. The paper verifies that with more investment in the quality cost, the sales revenue increases greatly and with more investment in quality cost, quality level enhancing, the ratio of quality cost and sale revenue will reduce.

Keywords:

Quality cost , quality level, sales revenue, system dynamics,

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Competing interests

The authors have no competing interests.

Open Access Policy

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The authors have no competing interests.