Contingency and Managment Reserves

Just want to make sure if my thought process is correct hence this clarification. Please correct me if any of my below statements are incorrect.


Rita Mulcahy states that Contingency reserves account for Known Unknown. According to me risks which fall under Active Acceptance and Passive Acceptance category are Know Unknown risk. So in this case will it be right to say that these contingency reserves apply for both Active acceptance strategy and Passive acceptance strategy.


Also for completely Unknown risks, the strategy to deal with these risks is creating Workaround when the risks occur. As Management reserves are accounted for Unknown risks, so will it be right to say that Management reserves can be used for these workarounds which is created to deal with unknown risks.


Thanks


Archana

I have not received any responses so far for my clarifications on Contingency & Management Reserves.


Looking forward for some responses please.


Thanks


Archana,

 Contingency reserves calculate during Perform Quantitative Risk Analysis based on the risks you’ve identified. You can think of a risk as a “known unknown”—an uncertain event that you know about, but which may not happen—and you can add contingency reserves to your budget in order to handle them.

Management  reserves are part of Cost Management—you use them to build a reserve into your budget for any unknown events that happen.

Regards 

Mudassar