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. 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. At the last of the financial year, they found that their products did not reach the market on time and due to which sales reduced and its per product cost is ₹95.

Tell which of the following is true regarding the company.

Efficient but not effective

The correct answer is option 1- Efficient but not effective

* The price set by the company is ₹100 but the cost came up at ₹95 means ₹5 is the difference and this difference makes the company efficient  as it reduces cost of the company. 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.

* At the last of the financial year, they found that their products did not reach the market on time and this makes company ineffective. The goods do not reach the market due to which demand can decline for them and competitors can enter the market. 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.

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