A Study of Supplier Selection and Quality Strategy Based on Quality Costs Theory

Quality costs theory was used to analyze the interaction between quality of supplier and quality of intramural produce system, which affect the quality of final product and quality economy of enterprise. Analysis results revealed that incremental loss caused by quality of supplier will decrease with falling of oneself quality level; Total procurement costs varies with increase of the probability of quality defects caused by suppliers, but how to vary and which quality level is best depends on minus result of the price of per qualified product and the influence coefficient of quality level to quality costs. Thus, intramural quality should also be considered when selecting the quality level of supplier to avoid pursuing supplier for high quality product with blindness.