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Contingency reserve - This is your fund for “known-unknowns“. That means you’ve already identified the risk; you just don’t know how much it will impact your project. This can be estimated based on the sum of all of your risks’ expected values.
So the project manager use it in implementing the risk response plan of "known-unknowns" risk.
Management reserve - This is for the “unknown-unknowns“. Basically, you didn’t even identify the risk until it has occurred. This may be derived from using percentage of the overall project budget.
The project manager can use it when the “unknown-unknowns“ risk occurred after approval from the management.
Contingency Reserve is utilised for Long Term Projects and it may be Long Term Expectations. Further, It may be utilised for fulfilling Social Responsiblity.
Management Reserve is for bridging the Fund Gaps and immediate requirement of the organisation.
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