Read the following passage and answer the question.

ABC Ltd set up a factory in a remote village U.P. to manufacture solar lights because there was no good source of electricity. It priced its solar light at ₹100 per piece while the cost of production was Rs 94 per unit. After setting up the factory, they noticed that demand was increasing day by day so they decided to increase production so that high sales could be generated. To increase sales, a Production manager named Ayush carries out the plans as framed by his superior. The company also decide to employ people from the nearby villages as there were very few job opportunities in those areas. It also opened schools for the children of its employees. As a result of the additional efforts, economies of scale were achieved and the cost per unit came down to Rs 93 per unit. However, by the end of financial year, though the production was increased, the management found that their products did not reach the market on time and due to which sales could not be increased as expected.

Tell which of the following is true regarding the company.

Efficient but not effective

The correct answer is option 1- Efficient but not effective

* Efficiency means doing the task correctly and with minimum cost. There is a kind of cost-benefit analysis involved and the relationship between inputs and outputs.The cost price per unit of the company earlier was Rs 95 per unit which was later reduced to is ₹94 due to increased production. This reduction of cost by Rs 1 per unit makes the company efficient  as it reduces cost of the company.

* Being effective or doing work effectively basically means finishing the given task. Effectiveness in management is concerned with doing the right task, completing activities and achieving goals. At the last of the financial year, the management found that their products did not reach the market on times a result. Thus, the expected sales increase did not happen. This means the company was not effective in achieving its goal.

Thus, the company is efficient as cost is reduced but not effective since the goods did not reach the market.