Reserve is one of the most essential elements of the project management life cycle in the sense that it provides the project management team and the project management team leader with the ability to help minimize risks. Specifically speaking, the reserve typically appears as a provision of clause in the currently drawn project management plan that is utilized to mitigate all costs that are expected to be incurred, as well as any schedule risks that may exist or could arise. The term reserve, in the concept of project management terminology, can be utilized with any particular modifiers of sorts (for example, management reserve, contingency reserve, etc.), which can provide some specific detail as to the element of the project management function that the reserve applies to, and exactly which project management related risk are expected to be mitigated by that particular reserve. The particular application area can alter the meaning of that reserve in some cases.
This term is defined in the 3rd and the 4th edition of the PMBOK.