Question
Produa Berhad has established in 1993 that has offer products geared towards various needs and wants, supported by a far-reaching nationwide sales and services network
- Produa Berhad has established in 1993 that has offer products geared towards various needs and wants, supported by a far-reaching nationwide sales and services network for the ultimate convenience of our valued customers. It owns a plant, equipment and vehicles worth of RM155 million and currently, there are 10,500 workers under its direct employment.
Amar Hazwan is a risk management consultant and has been hired by Produa to analyse and recommend the amount to be spent for safety measures in order to reduce worker injuries at 2 departments: Logistic and Parts Warehouse. Below is the injury records for both departments and the costs incurred for a 6-year period:
Year | Number of injured workers | Total cost of injury (RM) | ||
Logistic | Parts Warehouse | Logistic | Parts Warehouse | |
2014 | 230 | 190 | 72,000 | 67,500 |
2015 | 75 | 92 | 35,000 | 28,980 |
2016 | 135 | 141 | 120,000 | 119,550 |
2017 | 210 | 201 | 37,000 | 29,690 |
2018 | 150 | 177 | 116,000 | 121,000 |
2019 | 89 | 99 | 109,900 | 100,890 |
The sharp increase in the costs of injury in year 2019 has forced Produa to spend RM25,450 and RM32,800 for Logistic and Parts Warehouse respectively on the loss control expenditures in 2020 and the number of injured workers in that year was recorded at 290 people for both departments. In his analysis, Amar has estimate that if there were no loss control expenditures, the number of injured workers would increase to 301 and 303 for Logistic and Parts Warehouse respectively.
The additional spending on loss control expenditures will result in a lower number of injured workers as indicated in the following table:
Loss control expenditures (RM) | Number of injured workers | ||
Logistic | Parts Warehouse | Logistic | Parts Warehouse |
50,900 | 65,600 | 234 | 222 |
76,350 | 98,400 | 194 | 188 |
101,800 | 131,200 | 166 | 156 |
127,250 | 164,000 | 109 | 99 |
152,700 | 196,800 | 111 | 105 |
Based on the information above:
- Calculate the average injury severity for each department.
- Based on 3(a), determine and indicate the amount that Produa should spend on safety measures for each department.
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