7.3 Management and Contingency Reserves
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Management reserves are added to the overall project budget to account for unknown risks that were not planned for, while contingency reserves are allocated within the cost baseline for identified risks and are used for work packages or activities when planned risks occur. Both are types of project reserves but serve different purposes - management reserves are for completely unforeseen risks, while contingency reserves are budgeted amounts for known risks if they come to pass.
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7.3 Management and Contingency Reserves
- 3. What is it? Management Reserves and Contingency Reserves are used for different reasons and are often confused during the PMP exam. Project Reserves
- 4. Management reserves are added to the overall cost baseline to produce the project budget. They are used for “unknown unknowns” – risks that were not planned. Contingency Reserves are the budget within the cost baseline that is allocated for identified risks (known unknowns). They are used in work packages or activities when planned project risks arise. Project Reserves