What is the difference between contingency reserve and management reserve ? Saving Changes...
Markus KopkoAI Enabler for Project & Program Mgmt | Founder PMotion.ai / The PM
AI Coach| PMotion.aiHamburg, Hamburg, Germany
There can be two kinds of reserves for time and cost: contingency reserves and management reserves.
Contingency reserves account for "known unknowns" (or simply "knowns"); these are items you identified in risk management. Management reserves account for "unknown unknowns" (or simply
"unknowns"): these are items you did not or could not identify in risk management. Projects can have both kinds of reserves. Contingency reserves are calculated and become part of the cost baseline. Management reserves are estimated (e.g., 5 percent of the project cost), and then these reserves are added to the cost baseline to
get the project budget. The project manager has control of the cost baseline and can approve use of the contingency reserves, but management approval is needed to use management reserves.
(out of Rita's Book) Saving Changes...
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