What is the distinction between a portfolio and a project?

The distinction between a portfolio and a project is centered on their scope and purpose within an organization. A portfolio is designed to encompass a collection of projects and programs that are aligned with strategic business goals. It serves as a way to prioritize and manage resources across these initiatives, allowing for a holistic view of how different undertakings contribute to the organization's overall objectives.

In contrast, a project is a specific endeavor that has a defined start and end date, aimed at creating a unique product, service, or result. Projects involve detailed planning and execution of tasks that are necessary to achieve specific objectives. By tracking individual tasks, a project focuses on delivering its outputs within the constraints of time, budget, and resources.

This understanding clarifies that a portfolio monitors multiple initiatives as a way to optimize performance and value across all projects, while a project is limited to the execution and management of a single undertaking. This hierarchical relationship is essential for effective organizational planning and resource allocation, highlighting why option B accurately captures the distinction.