Variance Calculations for Materials Accounting System Design and Evaluation

Error propagation/variance calculations are used for establishing alarm limits for materials balance closures. Variance calculations may also be employed in the evaluation of accounting system designs for a proposed facility, as well as for upgrades of existing facilities. Information from such an exercise may be used to allocate resources for system improvements and identify process areas that require strict access or material controls. Simplifying assumptions are normally required since detailed data are not available for proposed facilities and may be difficult to obtain for existing facilities. Transfer, inventory, and measurement data are input into a code that calculates the variance for each term in the materials balance equation. Provision should be made for treatment of measurement correlations and holdup. The results are analyzed to determine major contributors to the total materials balance area (MBA) variance. A sensitivity analysis may be performed to determine the effect of changes in the measurements, measurement errors, or MBA structure. Examples of how variance calculations are used in accounting system analysis are discussed in the paper.