In contrast, MR is budget that is withheld for management control only and requires approval from a designated management owner, as it is not identified or tied to specific risks or events. The cost is essentially budget that is added to the project’s cost estimates that also becomes part of the project’s cost baseline, or performance measurement baseline (PMB). This contingency reserve is allocated following the identification of project risks and uncertain events. Project contingency reserve refers to an allocation of budget at a high level that is specifically reserved for project unknowns. The agreement is that cost contingency and contingency reserve are the same however, this is not be to confused with management reserve, or MR, which is different. ![]() In project management, we often come across terms such as cost contingency, contingency reserve, and management reserve (MR). ![]() ![]() What is Contingency Reserve and How Does it Work?
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