ACCA PM Syllabus E. Performance Measurement And Control - Value for Money (VFM) - Past Papers ^{4 / 4}

Def Co provides accounting services to government departments. On average, each staff member works six chargeable hours per day, with the rest of their working day being spent on non-chargeable administrative work. One of the company’s main objectives is to produce a high level of quality and customer satisfaction.

Def Co has set its targets for the next year as follows:
(1) Cutting departmental expenditure by 5%
(2) Increasing the number of chargeable hours handled by advisers to 6·2 per day
(3) Obtaining a score of 4·7 or above on customer satisfaction surveys

Which of the following options allocates the above targets to the correct value for money performance category?

Bus Co is a large bus operator, operating long-distance bus services across the country. There are two other national operators in the country. Bus Co’s mission is to ‘be the market leader in long-distance transport providing a greener, cleaner service for passengers nationwide’. Last month, an independent survey of 40,000 passengers was carried out, the results of which are shown in the table below:

Table: Bus passenger satisfaction % by national operator

* denotes that the percentage has not yet been calculated.

The ‘overall satisfaction’ percentages, which have not yet been inserted into the table, are calculated using a weighted average which reflects the importance customers place on each of the other three criteria above. The weightings used are as follows:

Value for money   40%
Punctuality           32%
Journey time        28%

The managing director (MD) of Bus Co has said: ‘Independent research has shown that our customers are the most satisfied of any national bus operator. We are now leading the way on what matters most to customers – value for money and punctuality.’

Required:
(a) Calculate the ‘overall satisfaction’ percentage for each operator. (2 marks)

Bus Co is a large bus operator, operating long-distance bus services across the country. There are two other national operators in the country. Bus Co’s mission is to ‘be the market leader in long-distance transport providing a greener, cleaner service for passengers nationwide’. Last month, an independent survey of 40,000 passengers was carried out, the results of which are shown in the table below:

Table: Bus passenger satisfaction % by national operator

* denotes that the percentage has not yet been calculated.

The ‘overall satisfaction’ percentages, which have not yet been inserted into the table, are calculated using a weighted average which reflects the importance customers place on each of the other three criteria above. The weightings used are as follows:

Value for money   40%
Punctuality           32%
Journey time        28%

The managing director (MD) of Bus Co has said: ‘Independent research has shown that our customers are the most satisfied of any national bus operator. We are now leading the way on what matters most to customers – value for money and punctuality.’

Required:
(b) Taking into account all the data in the table and your calculations from part (a), discuss whether the managing director’s statement is true. (4 marks)

Bus Co is a large bus operator, operating long-distance bus services across the country. There are two other national operators in the country. Bus Co’s mission is to ‘be the market leader in long-distance transport providing a greener, cleaner service for passengers nationwide’. Last month, an independent survey of 40,000 passengers was carried out, the results of which are shown in the table below:

Table: Bus passenger satisfaction % by national operator

* denotes that the percentage has not yet been calculated.

The ‘overall satisfaction’ percentages, which have not yet been inserted into the table, are calculated using a weighted average which reflects the importance customers place on each of the other three criteria above. The weightings used are as follows:

Value for money   40%
Punctuality           32%
Journey time        28%

The managing director (MD) of Bus Co has said: ‘Independent research has shown that our customers are the most satisfied of any national bus operator. We are now leading the way on what matters most to customers – value for money and punctuality.’

When measuring performance using a ‘value for money’ approach, the criteria of economy, efficiency and effectiveness can be used.

Required:
Briefly define ‘efficiency’ and ‘effectiveness’ and suggest one performance measure for EACH, which would help Bus Co assess the efficiency and effectiveness of the service it provides. (4 marks)