Which of the following best describes the concept of total cost management:

Which of the following best describes the concept of total cost management:
A . A method of quantifying construction damages where the total job costs are subtracted from the original bid or estimate to determine the total cost amount for a claim
B . The practices and processes utilized to manage the total life cycle cost investment in a portfolio of
strategic assets
C . A job cost system for ensuring all aspects of a particular manufacturing process are accumulated completely
D . An integrating process that maps the fields of practice of cost engineering without linking it to project management, resource management, or accounting

View Answer

Answer: B

Explanation:

Total Cost Management (TCM) is a holistic approach that involves the application of practices and processes to manage the total life cycle costs of a portfolio of strategic assets. This concept extends beyond individual project management to encompass the entire investment life cycle, from initial planning and design through to operation, maintenance, and eventual decommissioning or replacement of assets. TCM aims to optimize the total cost of ownership and ensure that resources are allocated efficiently over the long term.

Option A refers to a specific method for quantifying construction damages, not the broad concept of TCM.

Option C describes a job cost system, which is a narrower focus than TCM.

Option D incorrectly states that TCM does not link to project management, resource management, or accounting, which are integral to TCM.

Therefore, B is the correct answer as it best describes the comprehensive and life cycle-oriented nature of Total Cost Management.