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Greetings our knowledgeable sir,
I dont understand why the answer for efficiency should equal “cost per journey to the hospital”. This sounds more like economy factor. Please explain why it is not to do with economy as I see its money related. And why its to do with efficiency.
I chose my answer as “a comparison of actual operating expenses against the budget” because efficiency is about how much went out for how much came in. How much we saved. And comparing expenses (what expense came out) to the budget (what was expected), helps judge the efficiency.
However the answer says this is an economy measure. So…Im really confused. I thought numerical like “cost” would always be to do with economy, whilst “comparisons” to always do with “efficiency”.
Please explain graciously.
Although this can be asked in Paper FM, it is more of a Paper MA and Paper PM question.
Efficiency is measuring how well they are using their resources, and given that they are a not-for-profit organisation providing transport to hospital, then the lower the cost per journey the more efficiently they are using their resources.
Comparing actual total costs with budget total costs is an economy measure because it is simply getting the total resources in the cheapest way and not looking a how efficiently the costs are. being spent.
I suggest that you look back at the Paper MA or PM lectures on this where I explain the differences with examples.
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