ExpertEasy2 marksMultiple Choice
ACCA · Question 15 · Performance measurement and control
Section A
City General Hospital is a not-for-profit organization evaluated on the 'Value for Money' (3Es) framework. The hospital recently negotiated a 10% discount on bulk purchases of surgical masks without compromising on the quality of the masks.
Which of the 3Es does this achievement primarily represent?
Section A
City General Hospital is a not-for-profit organization evaluated on the 'Value for Money' (3Es) framework. The hospital recently negotiated a 10% discount on bulk purchases of surgical masks without compromising on the quality of the masks.
Which of the 3Es does this achievement primarily represent?
Answer options:
A.
Economy
B.
Efficiency
C.
Effectiveness
D.
Equity
How to approach this question
Match the scenario (buying inputs cheaper) to the definitions of Economy (input cost), Efficiency (input/output ratio), and Effectiveness (achieving goals).
Full Answer
A.Economy✓ Correct
The 3Es are Economy, Efficiency, and Effectiveness.
- Economy: Obtaining inputs of the right quality at the lowest cost (e.g., bulk discounts).
- Efficiency: Maximizing output for a given input, or minimizing input for a given output.
- Effectiveness: Achieving the organization's ultimate objectives.
Common mistakes
Confusing Economy with Efficiency.
Practice the full ACCA PM — Performance Management Practice Exam 3
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