Page 102 - The Six Sigma Project Planner

with an actual amount. An accounting variance may or may not indicate a
special cause of variation; statistical techniques are required to make this
determination. The timing of variance reporting varies depending on the need
for control. The timing of variance reports should be determined in advance and
written into the project plan.
• Variance tables: Variance reports can appear in a variety of formats. Most
common are simple tables that show the actual/budgeted/variances by budget
item and overall for the current period and cumulatively for the project. Since it
is unlikely that variances will be zero, an allowance is usually made, e.g., 5%
over or under is allowed without the need for explanations.
• Control charts: For longer projects, historical actuals can be plotted on control
charts and used to set allowances.
• Variance graphs: When only tables are used, it is difficult to spot patterns. To
remedy this problem, tables are often supplemented with graphs. Graphs
generally show the budget variances in a time-ordered sequence on a line chart.
The allowance lines calculated from control charts can be drawn on the graph to
provide a visual guide to the eye.

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