Certified Supply Chain Professional (CSCP) Practice Exam

What is the role of project cost management?

1. Monitoring project timelines

2. Estimating costs of activities and materials, and creating a budget

3. Handling stakeholder communications

4. Assessing project deliverables

The correct answer is: Estimating costs of activities and materials, and creating a budget

Project cost management plays a crucial role in the overall success of a project by focusing primarily on estimating and controlling costs to ensure that the project remains within its approved budget. This involves several key processes, such as determining the costs associated with all project activities, materials, and resources, which allows project managers to create a detailed budget that covers the entire scope of the project. Accurate cost estimation is essential for budgeting, as it provides a financial framework within which the project must operate. By establishing a budget, project managers can also track and manage expenses, making adjustments as necessary to avoid cost overruns. This financial oversight is vital for maintaining project viability and ensuring stakeholder satisfaction. The other options, while important aspects of project management, do not encompass the primary focus of project cost management. Monitoring timelines relates more to project scheduling, handling stakeholder communications pertains to stakeholder engagement and management, and assessing project deliverables is focused on project quality and outcomes. Each of these areas is significant in its own right but does not replace the necessity of effective cost management in achieving overall project objectives.