In Don Reinertsen's book - Principles of Product Development Flow - the tradeoff between release size (number of stories) and release cost (regression test cost and release cost) is described like this:
In Ken Rubin's book - Essential Scrum - he talks about the benefits of smaller release sizes - being:
- Reduced cycle time
- Reduced flow variability
- Accelerate feedback
- Lower risk of failure
- Reduced overhead
- Increased motivation and urgency
- Reduced cost and schedule growth
He also uses the following way of describing this tradeoff:
They both talk about this in terms of a U-curve optimisation problem. The challenge is how to quantify this.
The above has the form of
cost = n*BS + m/BS
n= holding cost factor,
m= transaction cost factor and
BS= batch size.
You have to find the zero crossing of the first derivative for the minimum. The first derivative for the above is
n - m/(BS^2)
When setting that to zero you find
min cost = sqrt(m/n)
But how do you find the cost of releasing now vs releasing in six months? What was the opportunity cost?
My question is: How do you financially quantify the 'holding cost' of not releasing items until you have a big batch?