M3.4 Cost Control & Variance Analysis

By the end of this section, the learner should be able to use the approved cost baseline and the reliable current cost position established in M3.3 to determine where cost performance differs from plan, explain why it differs, judge whether the movement is temporary or structural, assess the likely effect on final cost, and convert the analysis into proportionate management action. They should be able to distinguish timing effects from genuine cost-performance problems; analyse period and cumulative movements; decompose material variances into quantity, rate, productivity, mix, rework, price and other drivers; challenge favourable as well as adverse results; and maintain the distinction between performance variance, authorised change, contingency and forecast.