| 2. | The following table shows estimates for development, marketing, and various quality costs with respect to the current practice and a proposed quality initiative in a software organization. What are the financial implications of the proposed initiative? What is your recommendation for the company? | | Current Development Practice (in Dollars) | With Proposed DFTS Initiative (in Dollars) |
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Cost | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
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Development Cost | 2M | 1.5M | 0 | 0 | 0 | 2M | 1.3M | 0 | 0 | 0 | Marketing cost | 75k | 150k | 300k | 450k | 250k | 90k | 200k | 350k | 500k | 300k | Prevention cost | 5k | 10k | 0 | 0 | 0 | 200k | 90k | 0 | 0 | 0 | Appraisal cost | 20k | 10k | 0 | 0 | 0 | 90k | 50k | 0 | 0 | 0 | Upstream Internal Failure Cost | 90k | 60k | 0 | 0 | 0 | 40k | 20k | 0 | 0 | 0 | Downstream Internal Failure Cost | 0 | 90k | 0 | 0 | 0 | 0 | 20k | 0 | 0 | 0 | External Failure Cost | 0 | 0 | 180k | 90k | 60k | 0 | 0 | 40k | 30k | 10k | Sales Revenue | 0 | 2M | 5M | 8M | 4M | 0 | 2M | 7M | 10M | 7M |
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