Yield Variance

Yield Variance in the construction industry refers to the difference between the expected and actual usage of materials during a construction project. It measures the efficiency in the use of materials, highlighting discrepancies that can lead to cost overruns or savings.

Key Components:

  • Expected Usage: The projected amount of materials required for a project based on estimates and project specifications.
  • Actual Usage: The actual amount of materials used during the construction process.
  • Variance Calculation: The difference between expected usage and actual usage, expressed as: Yield Variance = Expected Usage − Actual Usage

Causes of Yield Variance:

  • Waste: Inefficient use of materials leading to excess waste.
  • Theft: Loss of materials due to theft or misplacement.
  • Errors in Estimating: Inaccuracies in the initial material estimates or project specifications.
  • Changes in Design: Modifications to the project design that require more or fewer materials than initially planned.
  • Workmanship: Variations in the quality of workmanship affecting material usage.

Benefits of Analyzing Yield Variance:

  • Cost Control: Helps in identifying areas where material usage can be optimized, reducing unnecessary expenses.
  • Improved Estimating Accuracy: Enhances the accuracy of future material estimates by learning from past discrepancies.
  • Waste Reduction: Identifies sources of waste and provides insights into how to minimize it.
  • Resource Optimization: Ensures that materials are used efficiently, contributing to overall project efficiency and sustainability.
  • Risk Management: Assists in managing risks related to material shortages or excess, which can impact project timelines and budgets.


  1. Set Baseline Estimates: Determine the expected material usage based on project plans and specifications.
  2. Track Actual Usage: Monitor and record the actual material usage throughout the construction process.
  3. Calculate Variance: Compare the actual usage with the expected usage to identify any variances.
  4. Analyze Causes: Investigate the reasons behind any significant variances to understand the root causes.
  5. Implement Improvements: Develop and implement strategies to address the causes of variance, such as improving estimating techniques, enhancing material handling processes, or training staff to reduce waste.

Applications in Construction:

  • Project Management: Used by project managers to monitor material usage and ensure efficient resource utilization.
  • Cost Estimation: Helps estimators refine their calculations for future projects.
  • Performance Measurement: Assists in measuring the performance of contractors and subcontractors in terms of material efficiency.