Question

Tom is a purveyor of hot tubs. When a customer purchases a hot tub, Tom's employees deliver and install the hot tub at the buyer's home. Tom recently purchased new better-mileage trucks in order to bring down his cost of delivering hot tubs. What type of efficiency are the new trucks allowing Tom's business to achieve? Please choose the correct answer from the following choices, and then select the submit answer button. creative efficiency distributive efficiency production efficiency allocative efficiency

Answer 1

production efficiency

Step-by-step explanation:

Production efficiency is the maximum efficiency of a production system where all the components are working at optimum rates. Increasing the production efficiency would involve cutting corners in some aspects of production or improving in the production methods.

Production here refers to all the activities starting from acquiring raw materials to the delivery of the final goods to the customers. In the case of Tom he has made a process of delivery of goods better without compromising any of the other factors of production. The amount of time in gas stations would be lower than before making the deliveries faster and cheaper. Hence he has improved his productive efficiency.