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When Budget Variances Warrant Investigation by Engineering Project Management
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English
Abstract
Paper discusses two quantitative decision tools: one based on actual variance and one based on probability of observing such a variance. Both are used in deciding when to explore budget variances. The two methods are: calculation of decision areas based on the cost of investigation and expected savings produced by an investigation: calculation of the variance as a function of both time remaining in schedule and budget remaining.
Both methods can be programmed on a computer.
Details of the application of either method are presented.
Authors
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Citation
Schick, G. and Maybell, J., "When Budget Variances Warrant Investigation by Engineering Project Management," SAE Technical Paper 680683, 1968, https://doi.org/10.4271/680683.Also In
References
- Bierman Fouraker Jaedicke, “A Use of Probability and Statistics in Performance Evaluation.” Journal of Accounting Review June 1961
- Parzen “Modem Probability Theory and its Application.” New York John Wiley and Sons, Inc. 1960