The Relationship between Cost & Quality Submitted by: Haya A. El-Agha Submitted to: Eng. Hani Abu Amr

COST  It is an amount that has to be paid or given up in order to get something.  In business, cost is usually a monetary valuation of effort, material, resources, time and utilities consumed, risks incurred, and opportunity forgone in production and delivery of a good or service.

Types of Costs:  Direct Costs: They are all costs which you can identify when you produce a product. Direct materials, Direct Labor, Direct expenses  Indirect Costs: These are the costs which you can't identify when you produce your goods, because they are not directly related to them. Indirect Labor, Indirect expenses, Indirect materials

Types of Costs:  Variable Costs: These are the costs which will vary according to the number of unit produced  Fixed Costs: They do not vary according to the number of units made by your company.  Stepped Fixed Costs: These are fixed costs but which will vary according to the number of units your produce.  Semi-Variable Costs: These types of costs are hybrid cost, it means, it is made of variable and fixed costs

Quality  The ability of a product or service to meet or exceed customer expectations.  Why to measure Quality?  It gives mangers a way to judge the overall impact of quality on their area of responsibility.  It offers managers a finical method to evaluate the level of their quality and cost associated with different levels of quality.

The Relationship between Cost and Quality  Total Cost of Quality (CoQ) is a financial model of the costs incurred to operate and maintain the function of quality in a business.  It is also known as The Economic Conformance Model, shows us the rising costs associated with proactive management of quality as compared to the decreasing costs associated with improving quality.

Cost of Quality:  The cost of poor quality only reflects a portion of the total quality costs.  The internal and external failure costs are generally associated with the Cost of Poor Quality whereas the Appraisal and Prevention Costs constitute the costs related to ensuring the product is indeed to requirements.

COST AND QUALITY  For the last few decades, management has been told that quality pays. That doesn't mean that someone pays you for quality, but that any resources spent on improving quality will have a very positive return on investment.  Whatever you spend on improving quality will be returned to you in decreased costs.  What you need is a quality regime that tests items cumulatively, that reports errors immediately that addresses problems when they occur, and uses performance measurements throughout the business to ensure high quality is established and continually monitored

Increase quality and decrease costs with IBM Rational quality gates  Why choose IBM® Rational® Quality Management solutions?  Single integrated software quality management platform for improved reliability, predictability and team efficiency across the software lifecycle  Superior functional testing with test automation and data sharing.  Integrated traceability of business, functional requirements.  More thorough performance testing both pre and post deployment for reduced system downtime  Integrated web application security and compliance testing

Summary For IBM Case  Quality gates boost project quality by helping ensure that best practices are followed and measured against previous projects. By scrutinizing the software you're developing, you can raise quality issues earlier in your development process, making defects cheaper to fix — helping you reduce your IT operating costs.

Idea of Quality Gates  We are looking for some kind of green light before moving to the next phase in the software development lifecycle.  Checkpoints that we pass through between phases of a project, they help us improve quality by helping ensure that we are following best practices.  helps us spot trends in the software that we are developing and thus address quality issues earlier.  Catching defects early makes them much cheaper to fix, which is likely to result in a reduction in your IT operating cost.  Quality gates help increase quality yet, reduce overall cost.

Rationale  organizations have one quality gate sandwiched between the build phase and the delivery phase: the test phase  Organizations look to the test phases for final approval before deploying products to their customers  This places pressure on the testing group to document every defect before deployment, which is unrealistic.  Companies cannot rely on just one final test or quality gate for overall quality. They need to be more flexible

Checkpoints and best practices  Focusing on quality early in your software lifecycle is vital to increasing quality and decreasing costs, and Rational quality gates offer checkpoints along the development phases.  Must employ measurements, benchmarking, and re- measurements.  Software development consists of a number of phases and they are essentially the same for all styles of practices, including the waterfall process, the Rational Unifies Process, OpenUp, and an agile approach. In each practice, there is a requirements phase, design/code phase, build phase, test phase, and release. >> All phases could have a quality gate associated with it.

Phases  Requirements phase  Best practice is the tracking requirements associated with your test case.  prioritize test cases based on their complexity, risk, and functional area  How do we turn this best practice into a quality gate?  One way is to have this quality gate rolled up with other quality gates, and reported to management using the IBM Rational Insight tool or with the Rational Quality Manager solution's built in reporting functions.

Phases  Design and coding phase  Offers an opportunity for a quality gate designed around unit testing.  Identify if your code needs unit-test authoring and how successfully running the unit testing has been.  Using the Rational Insight solution, you can roll up these tasks into a measured, benchmarked quality gate.

Phases  Building phase  The building phase offers you another place to impart quality gates into your software development lifecycle

Phases  Testing phase Implementing quality gates during the testing phase offers your team several options  Test gates can be wrapped around almost any aspect of the testing phase.  One quality gate you can consider implementing is wrapping the quality gate around your testing framework.  This forces a review of the test script to insure reuse throughout the manual test steps.

Phases  Final Testing Phase  In the final testing phase, the Rational Quality Manager solution can provide a report about passed and failed test cases, the defects produced, the number of severe defects open, and other statistics.  These test results are part of the best practices for improving project quality and can be captured using the Rational Quality Manager environment, and they can be easily updated as your testing changes.

Summary  There is a negative relationship between cost and quality. As the quality increase the costs of it decrease.  This happens due to the operation efficiency and developments in quality management, by that the inspection cost is reduced and all other related costs, so that the cost of product decreases.