Question

In Unit III, you sent a document in which you informed management at Gemstone Fabricators, Inc. that it would need to enhance its accountability specifications in its performance evaluations for managers. You also pointed out the need to make sure that employees who have been asked to be involved in the safety endeavors at Gemstone understand and are trained in the roles they are expected to play. Cindy is the plant manager from Gemstone, and she has asked you to perform a sound level survey and noise dosimetry in the fabrication shop, which can get pretty noisy when all three mechanical power presses and the 12-foot shear are running at the same time for several hours a day. She also asked that you identify noise level exposures in the adjacent welding department. Your results indicate that the noise levels in the area are just above the Occupational Safety and Health Administration (OSHA) permissible exposure level for an average day in the fabrication department.

The welding department is adjacent to the fabrication department, and there is no separating wall. The welding operations are not quite as noisy, although the crackle of a well-adjusted MIG welder can be rather loud when welding mild steel. Noise monitoring and dosimetry of the welders indicated an exposure of just over OSHA's Action Level of 85 Dba. In addition, you remember taking the survey readings and watching the noise level jump in the welding shop every time the power presses or shear cycled in the fabrication area.

After consulting with fellow industrial hygienists, it was determined that setting up a 12' X 30' noise barrier wall between the fabrication area and the welding area and adding noise absorption panels to both sides of the barrier wall and to the white-painted concrete walls in the fabrication department would decrease the sound levels in the welding area to several decibels below OSHA’s Action Level.

Of course, these engineering controls will cost $33,000 dollars. This is compared to a continuing hearing conservation program to include annual audiograms, or hearing tests, annual training, and providing noise protection for the welding department which is estimated to cost $9,000 per year. This amount would be saved each year if the engineering controls are installed.

If the company takes out a loan for $33,000 at 5% interest, what will the payback period be for the loan? Please consult your unit lesson for the necessary formulas. What would be your recommendation to the employer with respect to the options available? Please show your work. Make sure you justify your reasoning and that you consider the hierarchy of controls in your discussion.

Your response must be at least 200 words in length in addition to your financial analysis

Answer 1

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When considering implementing new hazard controls it is important to know if the control is going to save more than it cost. This can be calculated using P=F(1+i)-n. Using this formula, I’ve calculated the payback period for Gemstone’s noise hazard control plans of a 12’x30’ noise barrier wall, and noise absorption panels on both side of the barrier wall and the floors to pay for itself within five years. My recommendation is to move forward with the implementation of the noise barrier wall and absorption panels. These controls are fixed and require no human manipulation for them to be effective in reducing the noise hazard. Whereas the hearing conservation program which cost $9,000 a year for annual audiograms, annual training, and annual (or more) replacement of noise protection PPE requires that employees properly use the PPE, actively listen and comprehend noise training, as well as possible compensation if audiograms come back with results showing hearing loss. Five years of the hearing conservation program will cost $45,000 (not accounting for any increasing cost) versus a $33,000 loan for the fixed controls that will pay for itself in five years and outlast the hearing conservation program with continued benefits in noise reduction.

Year 1                                                   Year 3                                                   Year 5

P= 9,000(1+0.05)-1                            P= 9,000(1+0.05)-3                            P= 9,000(1+0.05)-5

P= 9,000(1.05)-1                                 P= 9,000(1.05)-3                                 P= 9,000(1.05)-5

P= $8,571.43                                       P= $7,774.54                                       P= $7,051.74

Year 2                                                   Year 4

P= 9,000(1+0.05)-2                            P= 9,000(1+0.05)-4

P= 9,000(1.05)-2                                 P= 9,000(1.05)-4

P= $8,163.27                                       P= $7,404.32

Running Total

Year 1= $8,571.43

Year 2= $8,571.43 + $8,163.27= $16,734.70

Year 3= $16,734.70 + $7,774.54= $24,509.24

Year 4= $24,509.24 + $7,704.32= $31,913.56

Year 5= $31,913.56 + $7,051.74= $38,965.30

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