Step-by-step explanation:
In project management, a management reserve refers to a pool of resources, typically time or money, that is set aside to mitigate the risk of project overruns or unexpected events. The purpose of a management reserve is to provide a buffer that can be used to cover unforeseen issues, such as delays, cost overruns, or changes in scope, without impacting the project's schedule or budget.
A management reserve is different from a contingency reserve, which is also used to manage project risks. A contingency reserve is specifically allocated to cover the cost of known risks that have been identified during the planning process. In contrast, a management reserve is a more general buffer that can be used to cover any unexpected events or issues that arise during the project.
The size of the management reserve is typically determined by the project manager, in consultation with other stakeholders, based on factors such as the complexity of the project, the level of risk, and the overall budget. The reserve is held in a separate account or budget category and is only accessed in the event of an unforeseen issue that requires additional resources.