This paper classifies faults into three types : simple, degenerated, and regenerated faults. This paper also deals with the characteristics of each type of fault to determine the software reliability based on the assumption; i. e., a system consisting of several subsystems (modules) which may be debugged simultaneously. For each type of fault, several formulas are developed to obtain the failure rate and the expected number of failures found during debugging. A model is developed based on the formulas of the failure rate and the expected number of failures to decide the optimal release time of a new software: minimizing the total cost with constraints restricting to the failure rate of each module in the software. By using this model, optimal release times are found for some cases; the eliminated faults are assumed simple faults only, regenerated faults only, simple and degenerated faults, and so on.