Which reserve type typically decreases as a project progresses?

The correct answer is budget reserves. Budget reserves are specifically set aside to handle unforeseen costs or changes in the project scope that occur during the execution of the project. As the project progresses and more activities are completed, the need to use these reserves typically declines as the uncertainty surrounding specific project elements becomes clearer, and the anticipated costs become more predictable.

Budget reserves are adjusted or allocated based on updated risk assessments and progress evaluations. This means that as the project reaches completion, fewer adjustments or unforeseen circumstances are expected, thus diminishing the budget reserves over time.

In contrast, contingency reserves are generally tied to specific identified risks and may be utilized if those risks materialize. Management reserves are usually not directly used for project activities but are held for unforeseen circumstances that may arise, and emergency reserves are allocated for exceptionally urgent or critical scenarios. These other reserve types do not follow the same pattern of decreasing as the project nears completion.