Question

A company’s target production is 5000 units in a year. Ram, the manager of the company, is able to produce 5000 units, but at a higher production cost. Then Ram is .
(A) Effective as he was able to attain the targeted production at minimum cost
(B) Efficient as he was able to attain the targeted production at a higher cost
(C) Effective as well as efficient
(D) Effective but not efficient because of high production cost
(E) Efficient but not effective
Choose the correct answer from the options given below:

• A. (D) only
• B. (A), (C), and (E) only
• C. (A), (B), (C), and (D) only
• D. (C) and (E) only

Answer 1

The Correct Option is A

In business studies, effective and efficient are distinct concepts:

• Effectiveness means meeting a goal, irrespective of resource expenditure.
• Efficiency means meeting the same goal with minimal resources or cost.

In the provided scenario, Ram produced the target of 5000 units, fulfilling the goal (making him effective), but at an increased production cost. This indicates a deficit in efficiency.

Consequently, Ram is effective but not efficient due to the elevated production cost. The correct option is: D Only.