05 Sep 2010 
Support Center » Knowledgebase » PMP e-SIM Expert Comments » Cost Reserve v. Management Reserve
 Cost Reserve v. Management Reserve
Solution Student's Question:
Could you explain the difference between a cost reserve and a management reserve?
Are management reserves included with the project plan or added to it later or kept separate?

PMP Expert's Answer:
Contingency/cost reserve: A separately planned quantity allowing for future situations, included in the baseline and managed by the PMP. Known unknowns such as "we know we will have rework to do" just not sure how much. Management reserve: A separately planned quantity for future situations impossible to predict, unknown unknown. Not included in the original baseline budget and therefore requires a change in the baseline.

Article Details
Article ID: 10
Created On: 03 Apr 2005 07:15 AM

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