Two units of a company were given the same order with the same due date.
Unit P completed the whole order by the due date, but it had to pay overtime, so its cost was higher than planned.
Unit Q kept its cost per piece below the budget, but it completed only a part of the order by the due date.
Which of the following correctly describes the two units?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → P is effective but not efficient; Q is efficient but not effective.
Option (1) P is effective but not efficient; Q is neither efficient nor effective. — Incorrect. Q kept its cost low, so Q is efficient.
Option (2) P is efficient but not effective; Q is effective but not efficient. — Incorrect. The labels are reversed for the two units.
Option (3) P is effective but not efficient; Q is efficient but not effective. — Correct. Effectiveness means achieving the goal; P finished on time but at a high cost. Efficiency means doing the task at minimum cost; Q kept cost low but did not finish.
Option (4) P is both efficient and effective; Q is neither efficient nor effective. — Incorrect. P paid overtime, so it was not efficient.
NCERT (2026-27 Edition): “Effectiveness versus Efficiency … For example, it is easier to be effective and ignore efficiency i.e., complete the given task but at a high cost. Suppose, a company’s target production is 5000 units in a year. To achieve this target the manager has to operate on double shifts due to power failure most of the time. The manager is able to produce 5000 units but at a higher production cost. In this case, the manager was effective but not so efficient, since for the same output, more inputs (labour cost, electricity costs) were used. At times, a business may concentrate more on producing goods with fewer resources i.e., cutting down cost but not achieving the target production. Consequently, the goods do not reach the market and hence the demand for them declines and competitors enter the market. This is a case of being efficient but not effective since the goods did not reach the market. …” |