A defect which could have been removed during initial stage is removed in later stage how does it affect cost?

If a defect is known at the initial stage then it should be removed during that stage / phase itself rather than doing it some later stages. It’s a recorded fact that if a defect is delayed for later phases are proven more costly. Below figure shows how a defect is costly as the phase moves ahead. A defect if identified and removed during the requirement and design phase is the most cost effective, while a defect removed during maintenance is 20 times costlier than requirement and design phases. For instance if a defect is identified during requirement and design we only need to change documentation , but if identified during the maintenance we not only need to fix the defect , but also change our test plans , do regression testing and change all documentation for the same. This is why a defect should be identified / removed in earlier phases and the testing department should be involved right from the requirement phase and not after the execution phase.

Cost of defect increases with phase

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