Reserve Analysis: PMP Topics to Know

Want to knock out a significant amount of your PMP studying right now? Reserve analysis is a great place to start because it shows up in a number of places throughout the PMP exam. Knowing about reserve analysis can save you a lot of asking yourself this question: “Uh, what’s reserve analysis? Let me look it up for the tenth time!”

PMBOK describes reserve analysis as “an analytical technique to determine the essential features and relationships of components in the project management plan to establish a reserve for the schedule duration, budget, estimated cost, or funds for a project” (558). Hmm… well that doesn’t really do it for us, does it?

What to know about Reserve Analysis for the PMP

There’s really two parts that you need to know about reserves, and those are contingency and management reserves.

  • Contingency reserves are for known-unknowns. These are the negative risks that you plan for on a project.
  • Management reserves are for unknowns-unknowns. These are the risks you don’t plan for — and management gets to decide if and when these reserves are released.

Here’s where you’ll find reserve analysis in the PMBOK Guide. It’s always a Tool & Technique!

  • Monitor & Control Project Work process of Project Integration Management
  • Estimate Activity Duration process of Project Time Management
  • Estimate Costs process of Project Cost Management
  • Determine Budget process of Project Cost Management
  • Control Costs process of Project Cost Management
  • Control Risks process of Project Risk Management

Side note: this is why I enjoy and recommend looking at the PMBOK guide in different ways — you start to notice patterns. Try using “Control + F” to search for all of the instances of the term “reserve analysis” in the PMBOK guide.

As you can see, reserve analysis is primarily related to cost, but it also relates to integration, time, and risk management. Projects always have reserves to cover all those little things that come up, especially unanticipated costs. You know and document as many risks a possible, and those items are included in your contingency reserves. For those items you can’t know, you set aside management reserves that senior management can decide to release at the project manager’s request.

Of course, you know you aren’t really done studying Reserve Analysis — you are just getting starting. As this article shows, you’ll encounter it again and again as you study for the PMP exam. Having a basic understanding of it will allow you to relate to it better, and you have to go back and look up the definition each time anymore. Hooray!

What part of reserve analysis is toughest? Share in the comments below.

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  • Rich Rinaldi

    Rich writes about Excel and the PMP for Magoosh. He's an Excel nerd who passed his PMP exam with 4 Proficients & 1 Moderately Proficient (curse that Initiation domain!). He earned his BSBA in Operations Management at Georgetown University and his MBA in Non-Profit Management at Chaminade University in Honolulu. He works as a business analyst & project manager at a nationwide non-profit headquartered in Villanova, PA. Rich and his fiancée Hadley enjoy traveling the world or playing with Bear, Cherokee, and Nalani (their cats).

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