CFOS Unit 9/Efficiency and Cost Effectiveness Ratio
 |
Unit 9 |
Introduction | What is the Difference between Efficiency and Effectiveness | Efficiency | Cost-Effectiveness | Cost-Effectiveness of ODL Institutions | Making the Case for ODL |
EXERCISE 9.2 and 9.4: Efficiency and Cost-Effectiveness Ratios
A community college in Canada offers its programmes through both conventional, face-to-face classes and paper-based distance education materials. Information for 2004 on total student enrolments, total graduates and total costs for both modes in relation to the Certificate in Cost Accounting programme are given in the table below:
| Programme | Delivery Mode | Total Student Enrolments | Total Graduates | Success Rate (percent) | Total Costs (Cdn.$) | Average Costs per Student (Cdn.$) | Average Cost per Graduate (Cdn.$) |
| Cert in Cost Accounting | ODL | 131 | 43 | 34,977 | |||
| Cert in Cost Accounting | Conventional | 954 | 886 | 712,433 | |||
| Programme as a Whole | Combined | 1,085 | 929 | 747,410 |
| Exercise 9.2: Efficiency
Calculate the Average Cost per Student for the ODL and conventional modes of delivering this course, as well as for the programme as a whole. Insert your answers in the blank cells of the table below. Now calculate the Efficiency Ratio for the ODL versus conventional modes of this programme, using the average costs per student.
|
EQUATION
ER = ACa ÷ ACb
Where:
- ER = efficiency ratio
- ACa = average cost per FTE student for programme/institution A
- ACb = average cost per FTE student for programme/institution B
| Exercise 9.4: Cost-Effectiveness
Now calculate the Success Rate and the Average Cost per Graduate for the different modes and insert your answers in the blank cells of the table above. Once you have finished the above, calculate the Cost-Effectiveness Ratios for the two modes of the Certificate in Cost Accounting Programme. The equation is the same as for the Efficiency Ratio above, but utilises Average Cost per Graduate.
|
EQUATION for Cost-Effectiveness Ratio
- CER = ACGa ÷ ACGb
Where:
- CER = cost-effectiveness ratio
- ACGa = average cost per graduate for programme/institution A
- ACG b = average cost per graduate for programme/institution B
In this case study, what factors have influenced the relatively poor cost-effectiveness of the ODL mode of delivery?
Please refer to the Sample Answers for Exercices 9.2 and 9.4 by clicking on the link.
| 
