Overview

The Cost of Quality (COQ) is a project management metric. It is calculated as the percentage of a business’s costs incurred due to efforts to ensure product quality to total cost.

COQ consists of 3 types of costs:

• Prevention Cost
• Appraisal Cost
• Failure Cost
  • Internal Failure
  • External Failure

Preventive Cost

The Preventive cost includes training, developing methods/procedures, and defect prevention activities.

Appraisal Cost

The appraisal cost includes the cost of inspections, reviews, testing, and associated software.

Failure Cost

Failure Cost can be further divided into Internal Failure and External Failure. The failure cost includes the cost of rework due to failures and defects.

Internal Failure: Failures detected before product shipment
External Failures: Failures detected after product shipment

 

Cost Of Quality Formula

The cost of quality is calculated as follows:

COQ % =

      ( Preventive cost, Appraisal cost spent for ensuring
        quality and Failure costs due to poor quality )
——————————————————————-  *  100
       ( Total cost for developing the software product )