Reserve Analysis

During the estimation based on the uncertainties in the project one should park extra duration and or money which we call it as buffer. This is also called as reserves. There are two types of reserves: one is Contingency reserve and the second is Management reserve. Contingency reserve is based on “known unknown” and Management reserve is “unknown unknown”.

Contingency reserve can be derived based on quantitative risk analysis or based on standard deviation method or using organizational practices by putting some percentages.

Management reserve will be under management control and again this is derived based on unforeseen things which may happen to the project considering experience, historical data, contract terms and conditions, enterprise environmental factors, etc…

Reserve Analysis technique is used under the processes Estimate Activity Duration, Estimate Costs, Control Costs and Control Risks.