Academic journal article International Journal of Management

The Development and Application of a Group Decision Model Using Fuzzy Logic: The Case of Consumer Attitudes towards Risk

Academic journal article International Journal of Management

The Development and Application of a Group Decision Model Using Fuzzy Logic: The Case of Consumer Attitudes towards Risk

Article excerpt

Quality junction deployment (QFD) is a method for incorporating customer preferences into the design of product or services. It requires that consumer preferences, established through market research, be categorized and products or services then developed whose attributes match or fit these preferences. A problem here is that preferences can only be established imprecisely, itself a consequence of the fact that customers have different attitudes (optimistic, pessimistic) towards the risks involved in buying services or products. To deal with this problem, the present study develops a group decision making model using fuzzy logic-for establishing customer preferences. It then applies the model to QFD to the case of customers with optimistic (high risk) and pessimistic (low risk) attitudes in buying services or products. At this example five customers and a group of seven managers rated the importance of the key variables in the model. These ratings provided input into the model which was then used to calculate optimal decisions under different conditions. The results suggest that the model can be useful in these general circumstances.

(ProQuest: ... denotes formulae omitted.)

1. Introduction

To increase customer satisfaction, organizations should always try to improve their processes and products through a variety of methods [5, 15]. Quality function deployment (QFD) is a customer-driven quality system for meeting customer requirements and improving their satisfaction with an organization's products and services [3, 22, 23]. The idea behind the system or method philosophy is to 'translate' customer attitudes-towards particular services or products into measures that organization can then use or employ at each stage of the operations or production cycle to 'end up with satisfied customers [4, 12, 20]. Typically, QFD is composed of four aspects or phases; product planning, parts deployment, process planning, and production planning [2, 4, 13, 24]. Chan and Wu [4] have argued that HOQ (House of Quality), the product planning phase or aspect of QFD, as depicted in Figure 1, can be used or deployed to 'cover' or 'deal with' each phase or aspect of QFD through its linkage of customer requirements to the various measures that are employed or used at each phase of QFD. In QFD products and services are designed to meet customer requirements. It requires the marketing department, design engineers, and manufacturing staff to work together closely from the time the product is first conceived to its final delivery to customers [21].

There are six major steps in the implementation of HOQ, the terms for these being; (1) customer needs (WHATs), (2) planning matrix, (3) technical measures (HOWs), (4) relationship matrix (between WHATs and HOWs), (5) technical correlation matrix, and (6) technical matrix [2, 4]. To implement HOQ successfully, customers must first be found, their requirements established and analyzed, and the relationship matrix between WHATs and HOWs calculated. The results of analyzing mis matrix (of relationships) are used in the later stages of product and service development. The major methods for finding out customer requirements are market surveys, focus groups and interviews [11, 12]. In practice, determining customer requirements is a group decision-making process. This mainly because of the 'danger' of relying on a single researcher with his or her limitations of experiences, preferences or biases about the issues involved, and the fact that individuals are often unable to clearly identify their own psychological states. In contrast to how customer requirements are determined, a cross-functional team is typically used to determine the relationship between WHATs and HOWs [6]. Here it is often an advantage that team members could have significantly different opinions in evaluating the relationships based on their own experiences. Arrow [1] has argued group decision outcomes can never satisfy the preferences of all the decision makers, even if they are members of the same cross functional team. …

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