Both Contingency and Management reserves are used to handle risks.
Contingency Reserve is part of the project’s cost baseline. This amount is used for addressing risks that have materialized. Note that contingency reserve cannot be used to address a change request, not even if the reserve is unused.
Management Reserve is not part of the project’s cost baseline but it is part of the overall project budget. This amount can be used for issues that had not been previously identified as risks and thus are not part of the risk register. Management Reserve can be used only after management approves. In some projects, this reserve can be used for anything that the management approves be it a change request or a team lunch!
Check more articles on Risk Management
https://youtu.be/TuP617BQsxo Many project managers worry about AI taking over their roles. However, the rise of…
https://youtu.be/7-YSZc9YTEY The PMP exam has one requirement that stops many professionals in their tracks: three…
https://www.youtube.com/watch?v=b9IOF8h8CP0 Your path to leadership in the agile world requires more than just a passing…
https://youtube.com/live/8NUZ0j2XyJI The 5-Why technique is often presented as a perfect tool for root cause analysis.…
https://youtu.be/qHwsX9TbAGg?si=RWuHNbFRPnE1U9UE The CAPM is one of the most practical entry points into a project management…
https://youtu.be/njvcYdtPoBU Is the PMP a "golden ticket" to any industry you choose? Many project managers…