A contingency or management reserve to pay for additional costs associated with implementing response plans should be
A) absorbed as a cost of doing business.
B) planned into the project prices and budgets.
C) requested to be paid by the project sponsor in addition to the costs of doing the project.
D) added to the budget of the next project with the same sponsor.

Question

Quizplus · Accepted Answer

The contingency or management reserve should be planned into the project prices and budgets to ensure that the project has enough resources to cover any unexpected costs associated with response plans. This approach is considered best practice and helps to manage risks effectively. Absorbing the costs as a cost of doing business may not be feasible for the project, and requesting additional payment from the project sponsor may not be feasible or desirable. Adding the reserve to the budget of the next project with the same sponsor is not an appropriate solution as the reserve is specific to the current project.

A Contingency or Management Reserve to Pay for Additional Costs