Law of Diminishing Marginal Returns Notes: Definitions & Explanations PDF | Download eBooks
Study Law of Diminishing Marginal Returns lecture notes PDF with total quality management definitions and explanation to study What is Law of Diminishing Marginal Returns?. Study law of diminishing marginal returns explanation with TQM terms to review total quality management course for online MBA programs.
Law of Diminishing Marginal Returns Definition:
According to the law of diminishing marginal returns, there is a point at which investment in quality improvement will become uneconomical.
Managing Quality: Integrating the Supply Chain by S. Thomas Foster
Law of Diminishing Marginal Returns Notes:
Law of diminishing marginal returns state that keeping all the other inputs constant, at a specific point, the output starts to decrease marginally when an input variable is increased. In the field of quality, the law of diminishing marginal returns is used when quality and finance are discussed together. It is usually said that quality improvement is a continuous process. However, when the concept of quality is perceived through finance perspective, the law of diminishing marginal returns becomes a barrier which shows that at a certain point, the cost of improving quality becomes very high. Under this law, an organization is forced to take on a quantifiable and result oriented approach towards quality under financial perspective.
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