1. Charlie Gragg CEO Software Engineering Applications Solutions, Inc.

2.  Cost of Quality Definitions  Measuring COQ  Using COQ Software Engineering Applications Solutions, Inc. 1997. All Rights Reserved 2

3.  Cost of Good Quality  The resources expended creating and delivering a product or service free of defects not including any cost expended associated with re-conducting a process that resulted in a non-perfect product.  Cost Of Quality  The total resources expended creating and delivering a product or service free of defects. Software Engineering Applications Solutions, Inc. 1997. All Rights Reserved 3

4. Cost of Quality

5.  Define Quality Activities  Identify Activity Action Takers  Determine Activity Action Taker Cost Rates  Determine Activity Duration  Calculate Activity Cost  Record Quality Activities Per Period  Calculate COQ Per Period (Phase, Iteration, etc.) Software Engineering Applications Solutions, Inc. 1997. All Rights Reserved 5

6.  Five Major Areas  Prevention  Appraisal  Internal Failure  External Failure  Facilities Software Engineering Applications Solutions, Inc. 1997. All Rights Reserved 6

7.  Risk Management  Meetings  Documentation  Training  Testing  Change Management  Reports Software Engineering Applications Solutions, Inc. 1997. All Rights Reserved 7

8.  Reviews  Assessments  DHF Documentation  DHF Audits Software Engineering Applications Solutions, Inc. 1997. All Rights Reserved 8

9.  Exception Reports  Investigations  CAPA ’ s  Defect Correction  Requirements  Design  Code  Smoke  Verification (Regression)  Validation (Regression) Software Engineering Applications Solutions, Inc. 1997. All Rights Reserved 9

10.  Exception Reports  Investigations  CAPA ’ s  Defect Correction On Market Software Engineering Applications Solutions, Inc. 1997. All Rights Reserved 10

11.  Rent  Utilities Software Engineering Applications Solutions, Inc. 1997. All Rights Reserved 11

12. Software Engineering Applications Solutions, Inc. 1997. All Rights Reserved 12

13.  The following 11 Slides provide examples of Activity Data. Software Engineering Applications Solutions, Inc. 1997. All Rights Reserved 13

14. Employee Category Clerical Exempt Grade 12 Indirect Labor Exempt Grade 14 Exempt Grade 16 Section Manager Department Manager S/W Developers Vice Pres Software Engineering Applications Solutions, Inc. 1997. All Rights Reserved 14

15. Employee CategoryCodeSalary/Hour ClericalCL$20 Exempt Grade 12E12$30 Indirect LaborIL$40 Exempt Grade 14E14$50 Exempt Grade 16E16$60 Section ManagerE18$70 Department ManagerE20$80 S/W DevelopersDV$90 Vice PresVP$100 Software Engineering Applications Solutions, Inc. 1997. All Rights Reserved 15

16. Description Qty of Employees involved Time (hour) Employee's Category Sub-activity cost Requirements Analysis10.51-E-14$15.00 Code Creations111-DV$90.00 Unit Test Execution10.251-DV$22.50 Code Reviews30.253-DV $67.50 Conduct Engineering Test10.51-IL$13.00 SCR Update10.251-E-12 $5.00 Total Activity Cost $208.00 Software Engineering Applications Solutions, Inc. 1997. All Rights Reserved 16

17. Software Engineering Applications Solutions, Inc. 1997. All Rights Reserved 17

18. Software Engineering Applications Solutions, Inc. 1997. All Rights Reserved 18

19. Description Qty of Employees involved Time (hour) Employee's Category Sub-activity cost Requirements Analysis10.51-E-14$15.00 Total Activity Cost $15.00 Software Engineering Applications Solutions, Inc. 1997. All Rights Reserved 19

20. Description Qty of Employees involved Time (hour) Employee's Category Sub-activity cost Requirements Analysis10.51-E-14$15.00 Code Creations111-DV$90.00 Total Activity Cost $105.00 Software Engineering Applications Solutions, Inc. 1997. All Rights Reserved 20

21. Description Qty of Employees involved Time (hour) Employee's Category Sub-activity cost Requirements Analysis10.51-E-14$15.00 Code Creations111-DV$90.00 Unit Test Execution10.251-DV$22.50 Code Reviews30.253-DV$67.50 Total Activity Cost $195.00 Software Engineering Applications Solutions, Inc. 1997. All Rights Reserved 21

22. Description Qty of Employees involved Time (hour) Employee's Category Sub-activity cost Requirements Analysis10.51-E-14$15.00 Code Creations111-DV$90.00 Unit Test Execution10.251-DV$22.50 Code Reviews30.253-DV $67.50 Conduct Engineering Test10.51-IL$13.00 SCR Update10.251-E-12 $5.00 Total Activity Cost $208.00 Software Engineering Applications Solutions, Inc. 1997. All Rights Reserved 22

23. Description Qty of Employees involved Time (hour) Employee's Category Sub-activity cost Requirements Analysis10.51-E-14$15.00 Code Creations111-DV$90.00 Unit Test Execution10.251-DV$22.50 Code Reviews30.253-DV $67.50 Conduct Engineering Test10.51-IL$13.00 Conduct Verification Test10.51-E-14$15.00 SCR Update10.251-E-12$5.00 Total Activity Cost $223.00 Software Engineering Applications Solutions, Inc. 1997. All Rights Reserved 23

24. Description Qty of Employees involved Time (hour) Employee's Category Sub- activity cost Root Cause Analysis141-DV$360.00 Requirements Analysis10.51-E-14$15.00 Code Creations111-DV$90.00 Unit Test Execution10.251-DV$22.50 Code Reviews30.253-DV$67.50 Conduct Engineering Test10.51-IL $13.00 Conduct Verification Test10.51-E-14$15.00 SCR Update10.251-E-12$5.00 Validation10.51-E-14$15.00 C&R181-E-14$240.00 Total Activity Cost $843.00 Software Engineering Applications Solutions, Inc. 1997. All Rights Reserved 24

25. Software Engineering Applications Solutions, Inc. 1997. All Rights Reserved 25

26.  Measure Activity Costs Over Time  Phase  Iteration  Project  Identify Likely Improvement Areas  Facilitate Quality Improvements  Realize Cost Reductions thru Process Improvement Software Engineering Applications Solutions, Inc. 1997. All Rights Reserved 26