Cost Estimates PMBOK 7.2.3.1

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pranshul.rawat
Posts: 18
Joined: Sat Oct 17, 2020 2:47 pm

Cost Estimates PMBOK 7.2.3.1

Sun Oct 25, 2020 10:13 am

PMBOK 7.2.3.1 states that Cost estimates include contingency amount and management reserves.

Isn't the management reserve added to cost estimate to create Project Budget ?

I was under the impression that Cost estimates do not include management reserves and that management reserves are included in Project budget.

Can you please clarify this.
Thanks,
Pranshul (Exam scheduled on 21-Nov) :roll:
Update - Passed the exam :D Thanks to all the educators and all the best to fellow test takers.
manishpn
Expert
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Joined: Sat Jan 04, 2014 3:55 pm

Re: Cost Estimates PMBOK 7.2.3.1

Tue Oct 27, 2020 7:33 am

pranshul.rawat wrote:
Sun Oct 25, 2020 10:13 am
PMBOK 7.2.3.1 states that Cost estimates include contingency amount and management reserves.

Isn't the management reserve added to cost estimate to create Project Budget ?

I was under the impression that Cost estimates do not include management reserves and that management reserves are included in Project budget.

Can you please clarify this.
Good catch!! :)
This could be an oversight by PMI , Project cannot and does not estimate management reserve
Refer to fig 7-8
MR is part of Cost Budget but is not estimated by Project, its estimated by Management and not transparent to Project.
Br,
Manish P
PMP, PMI - ACP, SAFe Agilist
http://www.izenbridge.com/blog/7-effect ... ification/

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