Tutorial 7
DATE: 28/11/2012
INSTRUCTOR: HANIF ULLAH
Cost of Quality (COQ)
 It’s a term that's widely used – and widely misunderstood.
 The "cost of quality" isn't the price of creating a quality
product or service. It's the cost of NOT creating a quality
product or service.
 Every time work is redone, the cost of quality increases.
Obvious examples include:
 The reworking of a manufactured item.
 The retesting of an assembly.
 The rebuilding of a tool.
 The correction of a bank statement.
 The reworking of a service, such as the reprocessing of a
loan operation or the replacement of a food order in a
restaurant.
Types of Quality Costs
 Prevention Costs:
 The costs of all activities specifically designed to prevent
poor quality in products or services.
 Examples are the costs of:
 New product review
 Quality planning
 Supplier capability surveys
 Process capability evaluations
 Quality improvement team meetings
 Quality improvement projects
 Quality education and training
Types of Quality Costs
 Appraisal Costs:
 The costs associated with measuring, evaluating or
auditing products or services to assure conformance to
quality standards and performance requirements.
 These include the costs of:
 Incoming and source inspection/test of purchased
material
 In-process and final inspection/test
 Product, process or service audits
 Calibration of measuring and test equipment
 Associated supplies and materials
Types of Quality Costs
 Failure Costs
 The costs resulting from products or services not conforming to
requirements or customer/user needs. Failure costs are divided
into internal and external failure categories.
 Internal Failure Costs:
 Failure costs occurring prior to delivery or shipment of the
product, or the furnishing of a service, to the customer.
 Examples are the costs of:
 Scrap
 Rework
 Re-inspection
 Re-testing
 Material review
 Downgrading
Types of Quality Costs
 External Failure Costs:
 Failure costs occurring after delivery or shipment of
the product — and during or after furnishing of a
service — to the customer.
 Examples are the costs of:
 Processing customer complaints
 Customer returns
 Warranty claims
 Product recalls
 Total Quality Costs:
 The sum of the above costs.
Identify software quality Cost
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Project quality plan
Number of errors per 1000 line of code (KLOC)
Over time hours to finish software inspection
Configuration management tool purchase
Detailed design walkthrough
Re-programming of defects of a program before shipment
Room temperature
Payment of external consultant to participate in unit testing
Payment of external consultant to prepare software quality assurance
procedures and checklists
Purchase of software unit to integrate with our application
Training of programmers in a course " Java advanced programming"
Correction of software defects for installed software after customer
complaints
Construction of new company building
Importance of software quality cost model
 To help the project management team in distributing
the cost to the four parts and to check the outcomes.
 Based on theses outcomes the budget is adjusted and
redistributed i.e. a kind of decision making for
management.
Identify software quality Cost
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Project quality plan
NIL
Number of errors per 1000 line of code (KLOC)
NIL
Over time hours to finish software inspection
Appraisal Cost
Configuration management tool purchase
Prevention Cost
Detailed design walkthrough
Appraisal Cost
Re-programming of defects of a program before shipment Internal failure Cost
Room temperature NIL
Payment of external consultant to participate in unit testing Appraisal Cost
Payment of external consultant to prepare software quality assurance procedures and
checklists
Prevention Cost
Purchase of software unit to integrate with our application NIL
Training of programmers in a course " Java advanced programming“ Prevention Cost
Correction of software defects for installed software after customer complaints
External Failure Cost
Construction of new company building
NIL