When Budget Variances Warrant Investigation by Engineering Project Management

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.