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The optimum test point concerning defect costs is considered to be the moment when testing costs exceed the defect losses. This is because the fundamental goal of testing is to identify and mitigate defects before they reach the production stage, where they can cause greater financial losses.

In this context, if the costs associated with testing begin to exceed the losses incurred due to defects in the product, it indicates that the resources allocated for testing are no longer yielding a cost-effective return. At this point, it would be more efficient to reduce the extent of testing or to optimize the testing approach rather than to continue incurring high testing costs without a proportional reduction in defect-related losses.

By focusing on this balance — where testing costs and defect losses are strategically evaluated — organizations can maximize their resource allocation, ensuring that testing activities are targeted at areas that yield the most significant benefits in defect reduction and overall cost savings.