Reserve analysis

In project management, the term ‘reserve’ refers to cost buffers commonly known as ‘reserves’. Reserves are provided at the activity level, work package level and at the project level. The project’s budget consists of bottom up aggregation of costs and reserves.

At the activity level one provides activity contingency reserves to take care of the unforeseen events while performing the activity. These are known as ‘Activity contingency reserves’. At the work package level ‘Work package contingency reserves’ are provided to take care of the work package level contingencies. At the project level ‘Management reserve’ is provided to take care of the project level contingencies.

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