Reserves are controlled by the project manager and the owner of the project and are used to cover major unforeseen risks to the entire project.
The management reserve, which is under the responsibility of the project manager and the project owner, is used to cover significant unanticipated risks to the overall project.
What is the management reserve?
The portion of the project budget set aside in the management reserve is for unanticipated work that falls under the project's purview. The final project budget is created by adding the management reserve to the cost baseline.
Unforeseen risks are covered by the management reserve, which is applicable to the entire project.
The owner, the project manager, or upper management typically have control over these reserves. Management reserves are separate from the budget.
The cost baseline for the management reserve is often increased by 5 to 10% in order to estimate the management reserve.
The project manager would determine the management reserve as $6,050 (or $121,000 × 5%), assuming a cost baseline of $121,000 and a 5% management reserve.
Therefore, the management reserve, which is under the responsibility of the project manager and the project owner, is used to cover significant unanticipated risks to the overall project.
Know more about the management reserve here:
#SPJ4
If your question is not fully disclosed, then try using the search on the site and find other answers on the subject Business.
Find another answers