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Chap 10 Hkfndfkljehfi

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0% found this document useful (0 votes)
34 views26 pages

Chap 10 Hkfndfkljehfi

dtydgdsfdf

Uploaded by

honeymandiyan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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You are on page 1/ 26

8/6/2014 1

Quality Costs
8/6/2014 2
Learning Objectives
After completion of this session you
will:
Understand the impact of measuring the
cost of quality
Be able to identify the quality costs in an
organization
Understand the process for measuring the
cost of quality

8/6/2014 3
Basic Thought and Question
What gets measured gets done


Just because we CAN measure something
does that mean we SHOULD?
8/6/2014 4
Benefits of Measurement
What are the benefits of measuring?
Gain insight into the product or process
Allow us to manage by facts
Takes away the guess work
Others?
8/6/2014 5
Pitfalls of Measurement
What are the pitfalls in measuring?
Can sometimes drive undesirable behaviour
Can create fear
Can blind you to other factors
Others?
8/6/2014 6
Quality Costs and Profit



Features
Cycle Time Share Price Warranty Waste
Income
Lowest Deficiencies
Cost
Profit
8/6/2014 7
Cost of Quality
Quality costs can mean two things:
Cost of attaining quality
Cost of poor quality
Can run 10 - 30% of sales or 25 40%
of operating expenses
8/6/2014 8
Cost of Quality
We need to communicate to
management the impact of quality in
language they understand which is
often in terms of dollars.

Quality cost measurement and
publication does not solve quality
problems.
8/6/2014 9
Cost of Quality
0
100
Failure Cost
Costs of appraisal
and Prevention
Total Cost
Quality of Conformance, %
Cost
per
good
unit of
product
8/6/2014 10
Hidden Cost of Quality


Lost Customers
Bad Will
Hidden Rework
Rework
Testing Costs
Inspection Costs
Canceled Licenses
Bugs
Employee Turnover
Expediting Costs
Excessive Overtime
Field Service Costs
Customer Allowances
Missed Payments
Loss of Market Share
Excessive Travel Expense
Consulting Time
8/6/2014 11
Hidden Cost of Quality
Costs incurred in understating the cost of
poor quality
Hardware
Lost sales
Redesign of product and process
Product recall
Software
Production, control and release of patches
Rework
Cost built into estimates
8/6/2014 12
Cost of Quality
Broken down into two classifications and
four categories
Conformance
Prevention costs
Appraisal costs
Non conformance
Internal failure costs
External failure costs
8/6/2014 13
Cost of Quality
Appraisal cost activities
Inspecting
Testing
Monitoring
Auditing software/hardware processes
Maintaining test machines/equipment
8/6/2014 14
Cost of Quality
Prevention cost activities
Analyzing requirements
Planning for quality
Process control
Quality audits
Conducting supplier evaluations
Attending training
Consulting
8/6/2014 15
Cost of Quality
Internal failure cost activities
Scrap
Rework
Failure analysis
Re-inspection and retest
Expediting
Time away from development or
manufacturing
8/6/2014 16
Cost of Quality
External failure cost activities
Paying warranty costs
Providing a help desk
Non billable consulting time
Cancelled licenses or orders
Making allowances
8/6/2014 17
Group Exercise
Quality Costs Analysis
Your senior management wants to have an impartial third
party determine the true cost of quality for the past project.
As a group of quality specialists, you are about to receive a
report on costs associated with a software development
effort.
Your task will be to review each cost, assign it to an
appropriate category, and then make recommendations to
management as to a possible course of action.
Keep in mind that the only measure you have is time and so
you will need to assess the percentages as part of the entire
development effort.
8/6/2014 18
Group Exercise
Quality Costs Analysis
The costs are as follows:
code reviews - 20 hrs
training - 240 hrs
system test 1200 hrs
component testing - 300 hrs
test script writing - 200 hrs
requirements review - 50 hrs
bug fixes - 1780 Hrs
retesting fixed bugs - 1200 hrs
post-mortem review - 8 hrs
Total effort 6500 hrs
8/6/2014 19
Group Exercise
Quality Costs
Is there another way we could gain the
same insight into the process without
measuring quality costs?
What else could we measure in conjunction
with quality cost?
8/6/2014 20
Cost of Quality Example
Tracking costs
Testing
Bug/defect fixing
Planning
Training
8/6/2014 21
Sequence of Events
Review available literature
Select an organizational unit in the company
Discuss the objectives with key people
Collect cost available
Make proposal for full study
Publish draft of categories, get agreement
Finalize definitions and get management buy in
Establish who will collect data
Collect and summarize data
Present the results
8/6/2014 22
Cost of Quality Example
Results
72% of the development effort could be
classified as quality costs
Bug fixing - 35%
Testing - 26%
Prevention - 8%
8/6/2014 23
Cost of Quality Example
Quality Cost Breakout
Testing
26%
Planning
4%
Training
4%
Bug Fix
35%
Development
31%
8/6/2014 24
Cost of Quality Example
February
Bug Fix Testing Planning Training Development Hrs Available
Phil Smith 140.0 25.0 8.0 110 283.0
Ilene Bloggins 87.0 120.0 8.0 56 271.0
Skip Roy 92.0 4.0 4.0 75 175.0
Bill Lee 20.0 82.5 4.0 8.0 33.5 148.0
Matt Truman 65.0 100 165.0
Total 404.0 227.5 8.0 28.0 374.5 1042.0
% of Hrs Available 38.8% 21.8% 0.8% 2.7% 35.9% 100.0%
Total Quality Costs 667.5
Quality Costs % 64.06%
Bug Fix % of Quality Costs 60.52%
Testing % of Quality Costs 34.08%
Planning % of Quality Costs 1.20%
Training % of Quality Costs 2.69%
8/6/2014 25
Cost of Quality Example
Action plan or unexpected outcome
Time accounting system was
discontinued
The product was retired
8/6/2014 26
References
Juran, J.M., Jurans Quality Handbook,
McGraw-Hill New York, 1998, pp 8.1 8.26
Summers, D.C., Quality, Prentice Hall,
Columbus Ohio, 2003, pp 548 575
Schulmeyer, J., Handbook of Software
Quality Assurance, Prentice Hall, Upper
Saddle River, NJ, 1998, pp 195 - 216

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