Productivity of Alternative Inputs to Term Paper

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Besides calculating the return on investment of different inputs, or ROI, another approach is to calculate the Cost of Poor Quality (COPQ) - the cost of defects in the current process, product or service in contrast to the calculated cost of the existing process using a weighted risk of potential failures. This is a kind of modified Six Sigma risk management strategy to determine which process has the lowest risk of a potential failure.

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(Sharma, 2004) This strategy would mean calculating the risk of the potential failures of reducing inventory vs. The risks of having a lower inventory base to draw from in comparison to the competition's inventory stock.

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