A proposed engineering control is expected to cut the accident rate by 40 percent for a given process that was recently cited as being out of compliance by an OSHA inspector. Auditors have estimated cost data for accidents with this process as follows (average cost per accident):
Direct Cost Hidden Cost Freq/Yr
First aid cases 1000 4000 6
Med. treatment cases 6000 9000 1.5
Lost time cases 3000 50000 0.5
No-injury cases none 2000 5.0
a. Calculate the total benefit expected for this proposed engineering control. Show your calculations.
b. If the proposed engineering control will cost $40,000, does the cost-benefit analysis support funding it? Why or why not?
c. What other reasons might support funding the project?