Zero value of contingency reserve?
A project manager is trying to plan for a contingency reserve as part of the cost estimates for the project. Which of these would be an incorrect way to plan for contingency reserves?
A Start the project with a zero value for contingency reserve.
B Plan for contingency reserve as a fixed number.
C Plan for contingency reserve as a percentage of the estimated cost.
D Use quantitative analysis methods to arrive at the contingency reserve.
The answer is A,
A - It would be incorrect to start the project with a zero value for contingency reserves. One of the three methods listed could be used to arrive at a contingency reserve number. As more precise information about the project is available, the contingency reserve may be used, reduced or eliminated. [PMBOK 5th edition, Page 206] [Project Cost Management]
But what mean zero value? i refer to PMBOK, but cannot find any meaning of this term.