Episode 44 — Cost Risk Concepts and Ranges
Cost uncertainty deserves the same rigor as schedule uncertainty, and this episode clarifies how to interpret ranges, contingencies, and reserves in both predictive and Agile settings. We define contingency as funding set aside for known-unknowns within the project baseline and management reserve as organizational-level funding for unknown-unknowns outside the baseline. The exam expects you to connect these definitions to thresholds, triggers, and escalation logic, recognizing which type of reserve is appropriate for each situation. We also explain how range estimates express variability and confidence rather than promise precision.
We expand with examples: using ±10% range estimates for procurement-heavy tasks or higher variance for emerging technology work. Best practices include tying contingency drawdown to indicator-based triggers, keeping reserve decisions visible in governance records, and updating ranges as data maturity improves. Troubleshooting topics include double-counting risk allowances, confusing budget buffers with reserves, and treating one-time contingency use as recurring funding. Candidates who demonstrate control over definitions and traceability in cost reasoning consistently perform well on the PMI-RMP exam and in professional practice. Produced by BareMetalCyber.com, where you’ll find more cyber audio courses, books, and information to strengthen your educational path. Also, if you want to stay up to date with the latest news, visit DailyCyber.News for a newsletter you can use, and a daily podcast you can commute with.
