According to the PMBOK Guide (6th and 7th Editions), Reserve Analysis is the specific tool and technique used to determine the amount of contingency and management reserves needed for a project. This analysis is utilized across several processes, including Estimate Costs, Determine Budget, and Estimate Activity Durations.
The concept is based on the following components:
* Contingency Reserves: These are provisions held for " known-unknowns " -identified risks for which a response has been developed. These reserves are included in the cost baseline and the schedule baseline.
* Management Reserves: These are amounts held for " unknown-unknowns " -unforeseen work that is within the scope of the project. These are NOT part of the cost baseline but are part of the total project budget.
* The Process: Through Reserve Analysis, the project manager evaluates the risk register and the level of uncertainty to calculate the necessary buffer. As the project progresses and risks are realized or retire, the reserve analysis is updated to see if the remaining reserves are sufficient or if they can be released.
Analysis of Distractors:
* A (What-if scenario analysis): This is a technique used to evaluate the impact of various scenarios (e.g.,
" What if the delivery is delayed by two weeks? " ) on project objectives. It is used for modeling, not specifically for calculating the quantity of reserve funds or time.
* B (Simulation): Techniques like Monte Carlo analysis simulate the project many times to provide a distribution of possible outcomes. While simulation can inform the amount of reserve needed, the specific term for the act of setting aside and managing those funds is " Reserve Analysis. "
* C (Alternatives analysis): This is used to evaluate different options or approaches to perform the project work (e.g., making vs. buying, or using different tools). It is not the primary tool for determining risk- based contingency.