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Cost Variance

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Cost variance is a financial metric that measures the difference between the budgeted or planned costs and the actual costs incurred for a project or operation. It is used to assess performance, identify discrepancies, and inform decision-making in project management and financial analysis.
lightbulbAbout this topic
Cost variance is a financial metric that measures the difference between the budgeted or planned costs and the actual costs incurred for a project or operation. It is used to assess performance, identify discrepancies, and inform decision-making in project management and financial analysis.

Key research themes

1. How is cost variance analyzed and managed in quality management and manufacturing processes?

This theme investigates the modeling, estimation, and practical implications of cost variance specifically related to quality costs in manufacturing and process improvement. It focuses on methods to quantify, control, and reduce cost variance arising from quality conformance and non-conformance, utilizing concepts like Cost of Quality (COQ), process-based cost modeling, and uncertainty propagation. Understanding cost variance here is crucial for improving product quality while controlling manufacturing costs and increasing overall organizational competitiveness.

Key finding: This paper conducts a systematic literature review revealing that cost variance in quality management can be effectively addressed through Cost of Quality (COQ) frameworks that categorize costs into prevention, appraisal, and... Read more
Key finding: This review paper synthesizes multiple quality cost models, focusing on prevention, appraisal, and failure cost categories, examining their application across industries to manage variance in quality-related costs. It... Read more
Key finding: The study introduces detailed process-based cost modeling techniques that link product design and process changes to production costs, highlighting how variance in cost arises from interdependent technical and economic... Read more
Key finding: This paper develops a bottom-up hybrid parametric cost estimation framework for composite manufacturing that explicitly models uncertainty and variance in cost estimates. Using Gaussian error propagation and Monte Carlo... Read more
Key finding: It proposes the Correlated Cost Risk Analysis Model (CCRAM) which captures cost variance by considering correlation among risk factors affecting construction costs, overcoming limitations of deterministic and uncorrelated... Read more

2. What are the drivers and implications of cost variance and overruns in project risk management and estimation?

This theme addresses cost variance as uncertainty or deviation in project cost estimates, particularly focusing on risk-induced overruns and their probabilistic modeling. It examines statistical and analytical deficiencies in common project risk cost estimation methods, explores the empirical distribution of cost overruns in IT and infrastructure projects, and presents advanced models to improve accuracy in forecasting and controlling cost variance. The insights enable project managers and decision-makers to better quantify, price, and mitigate cost risk in various industry contexts.

Key finding: This article demonstrates that the standard Expected Value (EV) method for estimating total project risk cost systematically underestimates cost variance and contingency needs, especially due to low number of risk events,... Read more
Key finding: This study empirically analyzes cost variance in Swedish transport projects and finds that smaller projects exhibit much higher relative cost overruns than larger ones, with significant variances seen in rail projects... Read more
Key finding: Through large-sample empirical analysis, this research discovers that IT project cost overruns do not follow commonly assumed normal distributions but rather exhibit a power-law (fat-tailed) distribution, characterized by... Read more
Key finding: This study quantitatively identifies variables contributing to cost valuation variance, highlighting that depreciation rates and manual measurement errors significantly amplify valuation discrepancies, accounting for over 75%... Read more
Key finding: Using dynamic programming, this paper models cost variance arising from the option to switch between manufacturing modes under uncertainty, showing how flexible switching reduces expected costs and mitigates downside... Read more

3. How can advanced cost controlling and pricing methodologies reduce cost variance and improve project or operational performance?

This theme explores practical methodologies and tools to monitor, control, and price costs and their variances in manufacturing and project environments. It includes earned value management approaches, reactive power pricing in utilities, manufacturing accident cost modeling, and yielded cost metrics for manufacturing process performance evaluation. These methodologies provide actionable means to identify, measure, and control cost variances to improve decision-making, budget adherence, and operational efficiency.

Key finding: This study demonstrates the application of Earned Value Analysis (EVA) in construction cost management, showing that EVA parameters (such as Cost Variance and Schedule Variance) enable early detection of cost overruns and... Read more
Key finding: The paper develops an optimal power flow-based pricing model for reactive power (VAr) services that accounts for system loss minimization and voltage security margin, incorporating cost-benefit analysis and sensitivity... Read more
Key finding: This paper formalizes yielded cost as cost divided by yield and introduces a method to calculate step-specific yielded costs via changes in total process yielded cost upon step removal. This metric isolates the effective cost... Read more
Key finding: The model quantifies cost variance in manufacturing accident costs by integrating probabilistic accident occurrence, severity, equipment damage, economic impact, and operational data for different accident classes. Applied to... Read more
Key finding: Using regression analysis of Liberian construction projects, this study finds a significant correlation between project cost estimates and project success, implying that accurate cost estimation and control reduces cost... Read more

All papers in Cost Variance

Dalam pelaksanaan proyek konstruksi sering terjadi penyimpangan biaya yang disebabkan antara lain oleh material, peralatan, tenaga kerja, subkontraktor, overhead, dan kondisi umum. Material merupakan komponen biaya utama dalam proyek... more
Veronika, Alin and Riantini, Leni S and Trigunarsyah, Bambang (2006) Corrective action recommendation for project cost variance in construction material management. In Kanok-Nukulchai, Worsak and Munasinghe, Sunil and Anwar, Naveed, Eds.... more
Management Projects in Post-Conflict Countries: The Case of Liberia" cataloged both the practical and theoretical experience of the author after more than 20 years as a senior program officer, project manager, project coordinator, and... more
Project control tools are commonly used in the construction industry. Unfortunately, many projects run over budget and behind schedule, which suggests that there is something wrong in our project control system. The earnedvalue method... more
Project control tools are commonly used in the construction industry. Unfortunately, many projects run over budget and behind schedule, which suggests that there is something wrong in our project control system. The earnedvalue method... more
An experiment was conducted at two locations of Sylhet district of Bangladesh with seven hybrid rice genotypes of Bioseed India Ltd (Bio-404, Bio-453, Bio-543, Bio-460, Bio-648, Bio-649 and Bio-650) to evaluate their yield potentials. The... more
This study was conducted to evaluate the genetic diversity for several rice features and their association with yields, as well as to identify genotypes of short-duration rice. The experiment was conducted in the field in a natural... more
Trend removal is an important problem in most communication systems. Here, we show a proposed algorithm for trend (background) removal from Raman Spectra by merging local variance estimation and cubic spline interpolation methods. We... more
Rice is commonly produced without the application of any fertilizer nutrient in the southwestern parts of Ethiopia. However, the previous research results indicated the high response of rice crops to the application of N fertilizer... more
This study was conducted to evaluate the genetic diversity for several rice features and their association with yields, as well as to identify genotypes of short-duration rice. The experiment was conducted in the field in a natural... more
Lack of management of precast components in the project area lead to decreased productivity. Just In Time method use in construction projects able to reduce production costs, improved quality, and increased productivity. However, not all... more
ABSTRAK Dalam pelaksanaan proyek konstruksi sering terjadi peningkatan biaya yang disebabkan antara lain oleh material, tenaga kerja, peralatan, subkontraktor, kondisi umum dan overhead. Material merupakan komponen biaya yang paling besar... more
This study presents the effectiveness of scheduling techniques in the success of mechanical construction projects as an essential tool for project planning, implementation, evaluation and control. Improper project resources scheduling... more
Thirty three lines of F5 progenies obtained from Sabita/Sambamahsuri deriva tives were evaluated along with parents and three check varieties for 19 characters. Significan t differences were observed for all the characters sThree lines... more
Construction of high-rise structures was initiated in complex and dynamic problems resulting in circumstances of high uncertainty and risk, which were compounded by demanding many constraints. The occurrence of risk accidents in the phase... more
Twenty-nine genotypes of boro rice (Oryza sativa L.) were grown in a randomized block design with three replications in plots of 4m x 1m with a crop geometry of 20 cm x 20 cm between November-April, in Regional Agricultural Research... more
In the implementation of construction projects there are often irregularities in costs caused by, among others, materials, equipment, labor, subcontractors, overhead, and general conditions. Material is a major cost component in... more
Background: Balanced nutrition is an essential part of human diet and rice being consumed by more than half of the world population, having rice cultivars biofortified for high Zinc levels in polished rice would be very important to... more
An experiment was conducted at two locations of Sylhet district of Bangladesh with seven hybrid rice genotypes of Bioseed India Ltd (Bio-404, Bio-453, Bio-543, Bio-460, Bio-648, Bio-649 and Bio-650) to evaluate their yield potentials. The... more
Project failure results in adverse productivity and viability of construction organizations. Construction leaders are concerned with project failure because it disrupts construction organizations\u27 ability to be more profitable and... more
Dalam pelaksanaan proyek konstruksi sering terjadi penyimpangan biaya yang disebabkan antara lain oleh material, peralatan, tenaga kerja, subkontraktor, overhead, dan kondisi umum. Material merupakan komponen biaya utama dalam proyek... more
Dalam pelaksanaan proyek konstruksi sering terjadi penyimpangan biaya yang disebabkan antara lain oleh material, peralatan, tenaga kerja, subkontraktor, overhead, dan kondisi umum. Material merupakan komponen biaya utama dalam proyek... more
Background: Balanced nutrition is an essential part of human diet and rice being consumed by more than half of the world population, having rice cultivars biofortified for high Zinc levels in polished rice would be very important to... more
Background: Balanced nutrition is an essential part of human diet and rice being consumed by more than half of the world population, having rice cultivars biofortified for high Zinc levels in polished rice would be very important to... more
Trend removal is an important problem in most communication systems. Here, we show a proposed algorithm for trend (background) removal from Raman Spectra by merging local variance estimation and cubic spline interpolation methods. We... more
Dalam pelaksanaan proyek konstruksi sering terjadi penyimpangan biaya yang disebabkan antara lain oleh material, peralatan, tenaga kerja, subkontraktor, overhead, dan kondisi umum. Material merupakan komponen biaya utama dalam proyek... more
Most of the construction projects suffer from cost and time overruns due to a multiplicity of factors. Earned value management (EVM) is a project performance evaluation technique that has origins in industrial engineering, but which has... more
Department of Plant Breeding and Genetics, The University of Agriculture, Peshawar Department of Agronomy, The University of Agriculture, Peshawar Department of Soil and Environmental Sciences, The University of Agriculture, Peshawar... more
and Bhajan (V 16) following RCBD design with three replications. The size of unit plot was 3m×2.7m (8.1m 2). The distances between plot to plot and replication to replication were 0.75 m and 1.0m respectively.
This paper presents development of the earned value concept regarding forecasting project duration time. On the basis of the calculations carried out for an implemented investment project, consisting of development of the sanitary sewage... more
Genetic variability and heterosis was studied for the characters of no. of effective tiller, no. of ineffective tiller, initial flowering, no. of filled grain/panicle and no. of unfilled grain/panicle for six newly developed hybrids. In... more
Rice is a versatile crop globally, though it has relatively short history of production and research in Ethiopia. Hence, genetic improvement is highly important to increase the production and productivity of the crop, which needs... more
This study presents the effectiveness of scheduling techniques in the success of mechanical construction projects as an essential tool for project planning, implementation, evaluation and control. Improper project resources scheduling... more
The investigation was carried out in fifty elite rice genotypes to understand the association among the yield and yield related components, their direct and indirect effects on the grain yield using correlation and path analysis and the... more
by Foto Kashta and 
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The objective of this study was to evaluate different oat genotypes in order to compare grain yield and some important yield related traits during three consecutive years in the Central Region of Albania. The varieties were differed... more
Most of the construction projects suffer from cost and time overruns due to a multiplicity of factors. Earned value management (EVM) is a project performance evaluation technique that has origins in industrial engineering, but which has... more
Twenty-two upland rice varieties were evaluated in randomized complete block design with three replications during 2014 cropping season at Pawe Northwestern Ethiopia to estimate association among grain yield and yield related traits and... more
Drought is a major abiotic constraint for growing rain-fed rice in Bangladesh. A total of 175 rice genotypes were evaluated using field-managed screening protocol to identify reproductive phase drought tolerant genotypes at Bangladesh... more
The present investigation was conducted to evaluate 12 indigenous Joha rice genotypes for different yield characters under inorganic and organic cultures. The materials were characterized during sali season of 2015-16 at the... more
Twenty-two upland rice varieties were evaluated in randomized complete block design with three replications during 2014 cropping season at Pawe Northwestern Ethiopia to estimate association among grain yield and yield related traits and... more
Project monitoring and control processes are crucial aspects of project management. To perform an appropriate project tracking, Earned Value Analysis (EVA) has to be implemented to help the project managers to measure project... more
This work aims to study the genetic parameters for yield and yield contributing characters in thirty-two early maturing rice (Oryza sativa L.) lines. The morphological data were analysed by different statistical plant breeding software’s... more
Yield contributing traits in thirty three rice genotypes were studied for variances, heritability, correlation (genotypic and phenotypic) and path coefficient analysis. The highest phenotypic variation (σ2p), was found for No. of grain... more
This work aims to study the genetic parameters for yield and yield contributing characters in thirty-two early maturing rice (Oryza sativa L.) lines. The morphological data were analysed by different statistical plant breeding software’s... more
A subset (core set) of the base collection comprising of 160 short duration rice germplasm accessions held by Kerala Agricultural University, Thrissur was formed based on twenty-four quantitative characters using the Power Core (v.1.0).... more
A subset (core set) of the base collection comprising of 160 short duration rice germplasm accessions held by Kerala Agricultural University, Thrissur was formed based on twenty-four quantitative characters using the Power Core (v.1.0).... more
The associations among yield-related traits and the pattern of influence on rice grain yield were investigated. This evaluation is important to determine the direct and indirect effects of various traits on yield to determine selection... more
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