CIEE Cost-Benefit Analysis of Interventions 2 — Questions and Answers
Question 1: When calculating indirect costs of a workplace musculoskeletal injury, which of the following is typically included?
- Medical treatment bills paid by the employer
- Lost productivity from coworkers distracted by the incident (Correct answer)
- Workers' compensation insurance premiums only
- Cost of ergonomic equipment purchased after the injury
Correct answer: Lost productivity from coworkers distracted by the incident
Indirect costs include lost productivity from distracted coworkers, administrative time, and other hidden expenses beyond direct medical costs.
Question 2: The 'iceberg model' of injury costs suggests that for every $1 in direct costs, indirect costs typically amount to:
- $0.50–$1.00
- $1.10–$4.50 (Correct answer)
- $5.00–$10.00
- $15.00–$20.00
Correct answer: $1.10–$4.50
Research consistently shows indirect costs are approximately 1.1 to 4.5 times greater than direct costs, representing the hidden portion of the iceberg.
Question 3: A company is evaluating two ergonomic interventions: Intervention A costs $10,000 with a projected 3-year benefit of $40,000, and Intervention B costs $25,000 with a projected 3-year benefit of $80,000. Which metric best differentiates them for selection?
- Net present value alone
- Benefit-cost ratio (Correct answer)
- Payback period
- Total benefit dollars
Correct answer: Benefit-cost ratio
Benefit-cost ratio (4.0 vs. 3.2) normalizes for investment size and allows direct comparison of efficiency across interventions.
Question 4: Which of the following scenarios best represents a 'hard savings' benefit in ergonomic CBA?
- Improved employee morale after workstation upgrades
- Reduction in annual workers' compensation claim payouts (Correct answer)
- Decreased absenteeism due to higher job satisfaction
- Better team communication following ergonomic training
Correct answer: Reduction in annual workers' compensation claim payouts
Hard savings are quantifiable, direct financial reductions such as lower workers' compensation payouts that appear directly in financial statements.
Question 5: When conducting a pre/post analysis of an ergonomic intervention, the most critical methodological consideration is:
- Using the same analyst for both assessment periods
- Controlling for confounding variables such as seasonal workload changes (Correct answer)
- Ensuring the intervention is implemented on a Monday
- Surveying only employees who reported discomfort before the intervention
Correct answer: Controlling for confounding variables such as seasonal workload changes
Controlling for confounders like seasonal variation, staffing changes, or production shifts ensures the observed benefits are attributable to the ergonomic intervention.
Question 6: A discount rate is applied in ergonomic CBA primarily to:
- Account for inflation in equipment prices over time
- Reflect the time value of money when comparing future benefits to present costs (Correct answer)
- Reduce the perceived cost of the intervention for budget approval
- Adjust for differences in employee wages across departments
Correct answer: Reflect the time value of money when comparing future benefits to present costs
Discounting converts future benefit streams to present value, recognizing that a dollar today is worth more than a dollar in the future.
Question 7: Which cost category is most likely to be UNDERESTIMATED when performing an initial ergonomic CBA?
- Cost of ergonomic chairs or equipment
- Training costs for the new ergonomic procedures
- Lost productivity during the transition and learning curve (Correct answer)
- Price of external ergonomic consultant fees
Correct answer: Lost productivity during the transition and learning curve
Productivity losses during implementation and the learning curve are frequently overlooked but can be substantial during the transition period.
CIEE Cost-Benefit Analysis of Interventions 2
When calculating indirect costs of a workplace musculoskeletal injury, which of the following is typically included?