CIEE Cost-Benefit Analysis of Interventions 4 — Questions and Answers
Question 1: In a CBA comparing administrative controls (job rotation) to engineering controls (new equipment), which factor most often gives engineering controls a long-term financial advantage?
- Engineering controls require less initial capital outlay
- Engineering controls eliminate the hazard at the source and reduce ongoing training costs (Correct answer)
- Administrative controls are more expensive to document
- Job rotation programs require OSHA approval and associated fees
Correct answer: Engineering controls eliminate the hazard at the source and reduce ongoing training costs
Engineering controls address hazards at the source, providing sustained risk reduction with lower recurring costs compared to administrative controls that require continuous enforcement and training.
Question 2: A company uses experience modification rate (EMR) in its ergonomic CBA. What does a lower EMR indicate?
- The company has more experienced workers on average
- The company has fewer or less severe workers' compensation claims than industry average, resulting in lower insurance premiums (Correct answer)
- The ergonomic assessment was conducted by a more experienced evaluator
- Employees have been with the company longer and require less training
Correct answer: The company has fewer or less severe workers' compensation claims than industry average, resulting in lower insurance premiums
A lower EMR reflects a better-than-average claims history, which directly lowers workers' compensation insurance premiums and reduces total injury costs.
Question 3: Which data source is most reliable for establishing a baseline injury rate before calculating ergonomic intervention benefits?
- Anonymous employee surveys about discomfort
- OSHA 300 Log records and first-report-of-injury forms (Correct answer)
- Supervisor anecdotal reports of ergonomic problems
- National industry average injury rates from BLS
Correct answer: OSHA 300 Log records and first-report-of-injury forms
OSHA 300 Logs provide legally required, standardized records of workplace injuries, making them the most reliable internal baseline data source.
Question 4: When ergonomic improvements lead to increased production throughput, this benefit is categorized in CBA as:
- Cost avoidance
- Hard savings through productivity gain (Correct answer)
- Intangible benefit
- Regulatory compliance savings
Correct answer: Hard savings through productivity gain
Increased throughput from ergonomic improvements represents a measurable, quantifiable productivity gain that appears directly in production metrics and revenue.
Question 5: A 'cost-effectiveness analysis' differs from a 'cost-benefit analysis' in ergonomics primarily because:
- Cost-effectiveness analysis requires a higher initial investment
- Cost-effectiveness compares interventions by outcome per dollar without converting outcomes to monetary value (Correct answer)
- Cost-benefit analysis only applies to injury prevention programs
- Cost-effectiveness analysis is used only for administrative controls
Correct answer: Cost-effectiveness compares interventions by outcome per dollar without converting outcomes to monetary value
Cost-effectiveness analysis measures outcomes (e.g., injuries prevented per dollar) without requiring all benefits to be converted to monetary values, unlike full CBA.
Question 6: Which of the following best describes 'opportunity cost' in the context of ergonomic intervention decisions?
- The cost of missing an OSHA inspection deadline
- The value of the next-best alternative foregone when choosing a particular ergonomic investment (Correct answer)
- The financial penalty for not reporting an injury on time
- The cost of ergonomic equipment that was purchased but never installed
Correct answer: The value of the next-best alternative foregone when choosing a particular ergonomic investment
Opportunity cost represents the potential benefit lost from the best alternative not chosen, which is a critical consideration when allocating limited safety budgets.
Question 7: A company implements an anti-fatigue mat program at a cost of $5,000 and reports zero injury claims in the following year compared to three claims the prior year averaging $12,000 each. What is the first-year benefit-cost ratio?
- 2.4:1
- 7.2:1 (Correct answer)
- 3.6:1
- 12.0:1
Correct answer: 7.2:1
Benefits = 3 × $12,000 = $36,000 avoided; BCR = $36,000 ÷ $5,000 = 7.2:1, indicating strong return on the investment.
CIEE Cost-Benefit Analysis of Interventions 4
In a CBA comparing administrative controls (job rotation) to engineering controls (new equipment), which factor most often gives engineering controls a long-term financial advantage?