Which of the following terms best describes a provision in the project management plan to mitigate cost and / or schedule risk?
A) reserve
B) insurance
C) padding
D) discretionary fund

Question

Quizplus · Accepted Answer

A reserve is a contingency amount included in the project management plan to mitigate cost and/or schedule risk. It is a pre-planned amount of budget or time set aside as a buffer for unexpected events or changes in the project scope. Insurance, padding, and discretionary funds are not the best descriptions for this provision. Insurance is a separate financial instrument purchased to protect against financial losses. Padding is unethical and involves adding unnecessary costs or time to a project estimate for personal gain. Discretionary funds are allocated for known, but optional, scope items.

Which of the Following Terms Best Describes a Provision in the Project