ISTQB_3 Managing the Team_3.2 Stakeholder Relationships_TM-3.2.2 (K3) Apply a cost-benefit calculation to estimate the added value of testing for stakeholder

 

KEY CONCEPTS: Cost-Benefit Relationship of Testing

1. Testing Value Communication: Testing is beneficial both qualitatively (confidence, risk reduction) and quantitatively (defects found, costs saved).

2. Operational vs Strategic Focus: Test managers often focus only on test execution instead of highlighting strategic business value.

3. Quantitative Benefits:

   • Defects found/prevented before release

   • External/internal failure costs avoided

   • Appraisal cost savings

4. Qualitative Benefits:

   • Reputation enhancement

   • Legal safety

   • Predictable releases and stakeholder confidence

5. Cost Calculations:

   • Average Savings per Defect:

   • Total Cost of Quality (COQ):

6. Boehm’s Curve: Early defect detection is cheaper. The later you find a defect, the higher the cost.

7. Risk-Based Testing: Align test effort to business risk to ensure optimal cost-benefit balance.

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📊 SUMMARY TABLE

Cost Type	Description	Example Value
Defect Prevention Cost	Cost to prevent bugs before code is written	$180
Appraisal Cost	Cost to evaluate/inspect/test	$500
Internal Failure Cost	Fixing bugs found before release	$200
External Failure Cost	Cost of fixing bugs after release	$4000
Avg Savings per Defect	4000 - (500+200) = $3300	$3300

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🧠 MIND MAP (Quick Revision)

Cost-Benefit of Testing

• Quantitative

  • Defects Found

  • Cost Savings

  • Appraisal/Internal/External

• Qualitative

  • Confidence

  • Reputation

  • Legal Safety

• Formulas

  • Avg Savings = Ext Fail - (App + Int Fail)

  • COQ = Prevention + Appraisal + Internal + External

• Boehm Curve

  • Early Testing = Lower Fix Cost

• Risk-Based Testing

  • Test Based on Risk Priority

Short MCQ (1)
Scenario: You found that testing cost is rising while bugs found post-release are still high.
Question: Which metric could indicate a poor cost-benefit ratio of testing?
A) High appraisal cost
B) Low external failure cost
C) High average savings per defect
D) High external failure cost
✅ Answer: D

Short MCQ (2)
Scenario: A manager wants to understand if investing more in early-stage testing makes sense.
Question: What concept supports this strategy?
A) Pareto Principle
B) Defect Clustering
C) Boehm’s Curve
D) Regression Testing
✅ Answer: C

Long MCQ (3)
Scenario: Your test project had the following average costs per defect:

• Defect Prevention: $150

• Appraisal: $400

• Internal Failure: $250

• External Failure: $3500
  Question: What is the average savings per defect?
  A) $2850
  B) $3100
  C) $3500
  D) $2800
  ✅ Answer: A
  Explanation: 3500 - (400 + 250) = $2850

Scenario 1
You manage a safety-critical system. The cost of one post-release defect is $10,000. Pre-release costs are:

• Prevention: $500

• Appraisal: $700

• Internal Failure: $300
  Question 1: What is the average saving per defect?
  A) $8500
  B) $9000
  C) $9500
  D) $8200
  ✅ Answer: A
  Explanation: 10,000 - (700 + 300) = $8500

Scenario 2
You’re asked to reduce test costs by 20%, but the product is highly regulated.
Question 2: What should you recommend?
A) Reduce all test activities equally
B) Eliminate regression tests
C) Apply risk-based testing to prioritize
D) Skip integration testing
✅ Answer: C

Scenario 3
Your team found fewer defects than expected during UAT. The external failure cost is estimated at $6000.
Question 3: Which metric highlights UAT efficiency?
A) Test execution coverage
B) Defect containment
C) Defect detection percentage
D) Average cost per defect
✅ Answer: B

Scenario 4
You report high internal failure costs.
Question 4: What could help reduce these costs?
A) More exploratory testing
B) Improve defect prevention activities
C) Increase release cycles
D) Reduce test automation
✅ Answer: B

Scenario 5
A stakeholder doubts testing adds value.
Question 5: What argument can you use?
A) Testing ensures bugs never happen
B) Testing can lower total cost of quality by early detection
C) Testing avoids all legal risks
D) Testing is mandated by regulations only
✅ Answer: B

Scenario 6
Cost per defect:

• Prevention: $100

• Appraisal: $300

• Internal Failure: $200

• External Failure: $2500
  Question 6: Total COQ if 10 defects found before and 3 after release?
  A) $11,500
  B) $12,000
  C) $13,400
  D) $13,700
  ✅ Answer: C
  Explanation: 100 + (300×10) + (200×10) + (2500×3) = 100 + 3000 + 2000 + 7500 = $13,400

Scenario 7
Your test report includes Boehm’s Curve.
Question 7: What does this suggest to management?
A) Skip unit tests
B) Automate only GUI tests
C) Early defect detection saves cost
D) Late testing gives more coverage
✅ Answer: C

Scenario 8
Management is unsure about going live with 2 known low-risk defects.
Question 8: What can testing provide?
A) Legal waiver
B) Risk-based justification to support informed decision
C) Full defect removal guarantee
D) Cost estimate of future bugs
✅ Answer: B

Scenario 9
You're comparing testing costs across releases.
Question 9: Which metric is most helpful?
A) Defect aging
B) COQ trend analysis
C) Code coverage percentage
D) Number of releases
✅ Answer: B

Scenario 10
The test manager wants to show value to upper management.
Question 10: Which approach helps?
A) Show test case execution speed
B) Provide defect severity chart
C) Demonstrate cost-benefit through saved cost per defect
D) Share test team skills
✅ Answer: C