Article metrics

  • citations in SCindeks: 0
  • citations in CrossRef:0
  • citations in Google Scholar:[=>]
  • visits in previous 30 days:6
  • full-text downloads in 30 days:4
article: 6 from 570  
Back back to result list
Ekonomski horizonti
2019, vol. 21, iss. 1, pp. 75-89
article language: Serbian
document type: Review Paper

Creative Commons License 4.0
Long-term provisions as a security mechanism due to lack of quality
Univeristy of Niš, Faculty of Economy



Modern business conditions have been decisively indicating that the basis of the company's competitiveness is quality. The lack of quality creates dissatisfaction and affects customer loyalty. Lately, there has been a tendency of the growth of non-quality costs, which is a consequence of the lack of quality of the products delivered. Although numerous studies have models for calculating non-qualitative costs, no relevant mechanism has yet been found to manage these costs. In this study, the authors attempted to find a link between long-term provisions and the cost of external failure, which is dealt with by a small number of researchers. The aim of the research is to point out the importance of long-term provisions, which can be a relevant control instrument in managing the external failure costs. Survey confirmed the initial assumption, and showed that long-term provisions are an effective instrument for managing the costs of external failure. Also, on the case of first 100 enterprises on the list of the most successful in the Republic of Serbia in 2017, a positive, statistically significant correlation between long-term provisions and net profit of the company was identified.


quality; quality costs; external failure costs; long-term provisions


Agencija za privredne registre Republike Srbije Makroekonomska saopštenja 2006-2017. godine. Retrieved Oktober 21, 2018, from / Finansijskiizveštaji/Makroekonomskasaopštenja. aspx
Ali, H., Arif, W., Pirzada, D., Khan, A., Hussain, J. (2012) Classical model based analysis of cost of poor quality in a manufacturing organization. Journal of Business Management, 6(2): 670-680
Amberkar, S., Jagtap, M.M. (2014) Warranty cost modelling and analysis. International Journal of Scientific & Engineering Research, 5(12): 40-44
Anđelković-Pešić, M. (2009) Modeli upravljanja troškovima kvaliteta. Računovodstvo, vol. 53, br. 7-8, str. 64-74
Baiman, S., Fischer, P.E., Rajan, M.V. (2000) Information, Contracting, and Quality Costs. Management Science, 46(6): 776-789
Bamford, D.R., Land, N. (2006) The application and use of the PAF quality costing model within a footwear company. International Journal of Quality & Reliability Management, 23(3): 265-278
Barbara, C., Eutropio, E., de Souza, C., Catunda, R. (2008) Modeling the cost of poor quality. in: WSC 08: Proceedings of the 40th Conference on Winter Simulation, 1437-1441
Bisgaard, S. (2007) Quality management and Juran's legacy. Quality and Reliability Engineering International, 23(6): 665-677
Bošković, G., Anđelković-Pešić, M. (2011) Upravljanje kvalitetom - osnova konkurentnosti preduzeća i privrede. Niš: Ekonomski fakultet Univerziteta u Nišu
Brandt, L., van Biesebroeck, J., Zhang, Y. (2012) Creative Accounting or Creative Destruction? Firm-level Productivity Growth in Chinese Manufacturing. National Bureau of Economic Research (NBER) Working Paper, No. 15152
Campanella, J. (1999) Principles of quality costs: Principles, implementation, and use. in: Annual Quality Congress Proceedings, 53: 507-508
Chatzipetrou, E., Moschidis, O. (2016) Quality costing: A survey in Greek supermarkets using multiple correspondence analysis. International Journal of Quality & Reliability Management, 33(5): 615-632
Cohen, J. (1988) Statistical Power Analysis for the Behavioral Sciences. Hillsdale, NJ: Lawrence Erlbaum Associates, 2nd ed
Đukić, T., Pavlović, M. (2014) Creative accounting and cash flows reporting. Facta universitatis - series: Economics and Organization, vol. 11, br. 3, str. 225-235
Eben-Chaime, M. (2013) A note on: The economic effects of quality improvements. Total Quality Management & Business Excellence, 24(3-4): 374-377
Feigenbaum, A.V. (1994) Controle da qualidade total: Gestão e sistemas. São Paulo, Brazil: Makron Books
Fu, F., Zhang, T. (2016) A New Model for Solving Time-Cost-Quality Trade-Off Problems in Construction. PLoS One, 11(12): e0167142-e0167142
IFRS (2018) IAS 37 - Rezervisanja, potencijalne obaveze i potencijalna imovina. Retrieved Oktober 13, 2018, from https://
Krishnan, S.K., Agus, A., Husain, N. (2000) Cost of quality: The hidden costs. Total Quality Management, 11(4-6): 844-848
Krstić, B., Anđelković-Pešić, M., Anđelković, A. (2010) Managing the variations in time, quality of realization and outputs of activities with the aim of encreasing efficiency of business process. Economic Themes, 48(3): 345-354
Lukić, R. (2017) The Impact of Long-Term Provision Costs on Performance of Trade in Serbia. Economic and Environmental Studies, 17(43): 455-474
Lukić, R. (2014) Utjecaj povrata roba na performanse u maloprodaji. Ekonomski pregled, 65(1): 89-104
Malinić, D. (2009) Savremeni izazovi integralnog istraživanja kvaliteta finansijskih izveštaja. Ekonomika preduzeća, vol. 57, br. 3-4, str. 138-155
Malmi, T., Järvinen, P., Lillrank, P. (2004) A collaborative approach for managing project cost of poor quality. European Accounting Review, 13(2): 293-317
Mamer, J. (1987) Discounted and per unit costs of product warranty. Management Science, 33(7): 916-930
Maronick, T. (2007) Consumer perceptions of extended warranties. Journal of Retailing and Consumer Services, 14(3): 224-231
Raupp, F.M., Gaebler, D.M. (2016) Identification and measurement of quality costs and non quality in a textile and apparel industry. Systems & Management, 11: 282-289
Sailaja, A., Basak, P., Viswanadhan, K. (2015) Hidden costs of quality: Measurement & analysis. International Journal of Managing Value and Supply Chains (IJMVSC), 6(2): 13-25
Satanova, A., Sedliacikova, M. (2015) Model for controling the total costs of quality. Procedia-Economics and Finance, 26: 2-6
Schiffauerova, A., Thomson, V. (2006) A review of research on cost of quality models and best practices. International Journal of Quality & Reliability Management, 23(6): 647-669
Teli, S.N., Majali, V., Bhushi, U., Surange, V. (2012) Assessment of cost of poor quality for automobile industry. International Journal of Engineering Research and Applications, 2(6), 330-336
Teli, S.N., Majali, V.S., Bhushi, U., Surange, V.G. (2014) Impact of poor quality cost in automobile industry. International Journal of Quality Engineering and Technology, 4(1), 1757-2185
Tsou, C.J. (2007) Economic order quantity model and Taguchi's cost of poor quality. Applied Mathematical Modelling, 31(2): 283-291
Vučićević, V., Anđelković-Pešić, M. (2012) Quantification of quality: The indicators of justification of the improvement of processes and product quality. Facta universitatis - series: Economics and Organization, vol. 9, br. 4, str. 495-506
Wojtaszek, H. (2015) Role of managerial accounting in the innovative enterprise. World Scientific News (WSN), 57(2016), 652-658
Xie, W. (2017) Optimal pricing and two-dimensional warranty policies for a new product. International Journal of Production Research, 55(22), 6857-6870