Joan is the project manager of the KYU project for her company. She is working with management on defining a contingency reserve for her project. Currently the project is scheduled to last 18 months…

The correct answer is D. Costs and schedule. A contingency reserve is an amount of funds or time set aside to address identified risks that may materialize during project execution. It is specifically allocated to handle 'known unknowns' - risks that have been identified and analyzed. Since risks can affect both cost…

Risk Strategy and Planning

Question

Joan is the project manager of the KYU project for her company. She is working with management on defining a contingency reserve for her project. Currently the project is scheduled to last 18 months and it has a cost budget of $2.5 million. What two areas of the project can the contingency reserve address in regard to risk management?

Options

AQuality and costs
BCost and resource management
CRisk and project planning
DCosts and schedule

How the community answered

(24 responses)

A
4% (1)
B
13% (3)
C
4% (1)
D
79% (19)

Explanation

A contingency reserve is an amount of funds or time set aside to address identified risks that may materialize during project execution. It is specifically allocated to handle 'known unknowns' - risks that have been identified and analyzed. Since risks can affect both cost (budget overruns) and schedule (time delays), the contingency reserve is designed to buffer against both dimensions. Quality (A) is not directly buffered by a contingency reserve in the same structured way. Resource management (B) is a component of cost but is not a standard pairing. 'Risk and project planning' (C) is too vague and does not reflect how contingency reserves are applied.

Topics

#Contingency reserve#Risk response planning#Cost risk#Schedule risk

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