How do you calculate the contingency reserve for positive risks?

Estimating Risk Management

Alaa Sultan Saudi Arabia

How do you calculate the contingency reserve for positive risks?

Does the contingency reserve for positive risks increase the total contingency reserve of the project or decrease it?

Posted: Apr 17, 2018 11:46 PM

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Utkarsh Ajay Shah Assistant Manager| L&T Hydrocarbon Engineering Ltd. Mumbai, Maharahstra, India

Positive risks do not necessarily increase the contingency reserve and going strictly by theory it actually deducts from the existing contingency risk reserve calculation. (please refer RIta Mulcahy 9th edition for examples) .
Many times for positive risks which are time bound opportunities, a contingency plan is drawn up and kept ready to be put in execution if the risk pops up. Sometimes, the project team may work in a way to initiate the pop up so as to grab the opportunity.

Posted: Apr 18, 2018 11:15 PM

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How do you calculate the contingency reserve for positive risks?

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