The context of value for money. Understanding these concepts helps in evaluating how well resources are being used to achieve desired outcomes

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27.11.2023, 23:45
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https://cbept.accaglobal.com/tr-candidate/exam
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The terms economy, efficiency and effectiveness, often reffered to "3Es", are fundamental concept in
the context of value for money. Understanding these concepts helps in evaluating how well resources
are being used to achieve desired outcomes.
1.Economy: 
This refers to minimizing the cost of resources used for an activity, without compromising
the quantity and quality of those resources. In a value for money context, economy means that
acquiring right quantity and quality of inputs like materials, labour and services at the lowest possible
cost. It is about being cost-conscious and seeking to reduce expenses where possible, ensuring that
funds are not wasted on unnecessary or overpriced resources.
2.Efficiency. 
Efficiency is about maximising outputs from a given set of inputs or using fewer
resources to achieve same the level of output. It relates to the relationship between inputs namely
resources such as time, money or labor and outputs namely the results achieved. In a value for money
context, efficiency means that getting most from available resources, optimizing processes and
increasing productivity to achieve better results without increasing expenditure.
3.Effectiveness: 
This refers to extent to which the intended outcomes or objectives are achieved. In
value for money context, effectiveness is about meeting the set goals or targets, achieving what is
planned, and ensuring that outcomes are in line with the objectives. It is not about doing things right
which is efficiency but about doing right things to achieve strategic goals.