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What is difference between cost efficiency and cost effectiveness?

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2011-01-13 10:37:03
2011-01-13 10:37:03

Efficiency refers to quantity or speed, effectiveness refers to quality.

Take the example of two Customer Service reps, the first one is very short with the customers. If they start to tell him any unneccessary information, he cuts them off and tells them "that's not important". He quickly resolves their issue but leaves them with a bad taste for the company - most will never be repeat customers. He is able to handle 50 customer calls per day.

The second rep takes time with the customers, shows empathy and concern, reviews the situation with the customer at the end of the call. Every customer is satisfied and impressed - all will certainly do more business with the company and refer their friends. This rep is able to handle 30 customers per day.

The first rep is very efficient, the second rep is more effective.

AnswerEffectiveness simply relates to reaching goals...so a company that has captured a 75% market share is very effective. Efficiency relates to how much they needed to spend or invest in relation to their effectiveness...so if two companies each had only a 0.1% rejection rate off the assembly line, they would be equally effective - but if the first company invested half as much as the second company in quality control, the first company is twice as efficient as the second company.
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Efficiency effectiveness can only be measured by results; cost efficiency, time efficiency, output efficiency, etc.

Efficiency is all about saving time, money or effort. Effectiveness is all about getting the job done.Improved:Efficiency is doing things right, and effectivenessis doing the right things. Efficiency is a measure of speed and cost. For example: Efficiency says "Getting someone in here right away is more important than getting the right person later." Effectiveness is a measure of quality. Effectiveness says the opposite: "Hiring the right person is more important than hiring someone right away."

That depends on the difference in cost of the cars, the difference in efficiency of the cars, and the cost per mile to operate them. Not enough information for us to give you a real answer.

Effectiveness is the achievement of objectives. Efficiency is the achievement of the ends with the least amount of resources.EFFICIENCY means: saving TIME, MONEY or EFFORTEFFECTIVENESS means how well the job gets done i.e. the quality of the output.Effective (adjective) describes something that obtains the result that was intended. Example use: An organized workspace for doing homework is an effective workspace.Efficiency (noun) is the competency in performance; the ability to accomplish with a minimum of time and effort or cost. Example: Efficiency is important in this job because each task takes a number of steps to complete.

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Efficiency is the degree of perfection in which one quantity is converted into another. For example a farmer will be interested in the efficiency with which cattle convert grass into beef weight.Note Efficiency and effectiveness are often confused with each other.Effectiveness concerns itself principally with the outcome. Even if excessive input was used, as long as the desired output was achieved, then effectiveness is gained.example. Even if it cost a few millions of dollars to cap the BP well, as long as it was successful, it was effective.

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Not necessarily.Efficiency means doing the same but for less cost, less waste, or less effort.Or efficiency can mean accompishing more but with the same effort or cost.In other words, efficiency means producing the maximum output from the minumum resources.Effectiveness, on the other hand, simply means the ability to accomplish a definite or desired objective.Sometimes desired objectives can only be accomplished by using different, alternative or additional methods and strategy, which may not always be 'efficient' in the sense of saving costs or effort.A desired aim of a good management is to be both effective and efficient, but sometimes effectiveness can only be obtained at great cost and effort, although it is always hoped that effectiveness can be achieved in the most efficient manner.

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This is the difference between what you are told you will pay and the actual cost of the financing with points and loan closing cost included.

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