Profit, quality and productivity

The objectives of an engineer in pursuing a project may be many and varied. Classical economics in contrast assigns only one objective to the businessman-maximising profit. The fundamental principle is that, whatever our motivation as engineers, as businessmen the motivation is to make a profit. Profit is simply the difference between the price which a product or service can command in the market place and the cost of providing that product or service. If we start to break down this relationship into more detailed components it can lead to some interesting insights. Price is quite simply what the purchaser is prepared to pay for the product or service. It is driven by the availability and price of both direct alternatives, meeting the same customer need and by indirect alternatives which supply different needs, but constitute a competing claim on the customer´s purse. The author looks at quality, productivity, business processes, and quality strategy in relation to profit/price/cost relationship