Question

In: Economics

your company owns a bus to transport workers workers to field work. the brakes fail ona...

your company owns a bus to transport workers workers to field work. the brakes fail ona journey and the bus into a shop front injuring two of employees travelling on the bus as well as a customer in the shop.

  1. What are your companys potential direct and indirect losses from the incident?

B. Which of the losses are related to ergonomics? How can you prevent them?

Solutions

Expert Solution

A. The accidents of any kind can have both direct and indirect costs.

The potential direct costs are

1. Costs related with an increase in the cost of insurance when the rate of accident increases.

2. Payment to the shopkeeper for the damages as well as to the customers in the shop, who was injured as a result of the accident.

The losses other than direct damage expenses are known as indirect loss. In this case the indirect losses are

1. The loss of productivity due to the absence of injured workers

2. Low productivity will lead to loss of revenue.

3. If additional staffs are hired to make up for the injured workers, then expenses will be incurred.

4. The cost of medical aid given to the injured workers.

5. The cost to repair damaged vehicle.

B. Ergonomics aim to improve workspaces and environment and there by reduce the injuries the employees are confronted with.

The losses that occurs as a result of the injuries caused to the workers comes under ergonomic losses.

We can prevent it by providing safe working spaces for the employees. In this case the loss could have been prevented by properly maintaining the vehicle


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