Question

It is well established that indoor air quality (IAQ) has a significant effect on general health and productivity of employees at a workplace. A study showed that enhancing IAQ by increasing the building ventilation from 5 cfm (cubic feet per minute) to \(20 \mathrm{cfm}\) increased the productivity by 0.25 percent, valued at \(\$ 90\) per person per year, and decreased the respiratory illnesses by 10 percent for an average annual savings of \(\$ 39\) per person while increasing the annual energy consumption by \(\$ 6\) and the equipment cost by about \(\$ 4\) per person per year \((A S H R A E\) Journal, December 1998 ). For a workplace with 120 employees, determine the net monetary benefit of installing an enhanced IAQ system to the employer per year. Answer: \(\$ 14,280 / y r\)

Short answer

Answer: The net monetary benefit per year is $13,280.

Step-by-step solution

List the benefits and costs per person per year

We are given the following information: 1. Productivity increase valued at $90 per person per year 2. Decrease in respiratory illnesses saving $39 per person per year 3. Increase in annual energy consumption costing $6 per person per year 4. Increase in equipment cost by about $4 per person per year

Calculate the total benefits and costs for 120 employees

To find the total benefits and costs, we will multiply the individual benefits and costs by the number of employees (120): Total productivity increase value: \(90 \cdot 120 = 10800\) Total savings from decrease in respiratory illnesses: \(39 \cdot 120 = 4680\) Total additional energy consumption costs: \(6 \cdot 120 = 720\) Total additional equipment costs: \(4 \cdot 120 = 480\)

Calculate the net monetary benefit per year

To find the net monetary benefit, we will subtract the total costs from the total benefits: Net monetary benefit = (Total productivity increase value + Total savings from decrease in respiratory illnesses) - (Total additional energy consumption costs + Total additional equipment costs) Net monetary benefit = \((10800 + 4680) - (720 + 480)\) Net monetary benefit = \(14480 - 1200\) Net monetary benefit = \(13280\) The net monetary benefit of installing an enhanced IAQ system for a workplace with 120 employees is $13,280 per year.

Key concepts

Productivity Impact of IAQ

Indoor Air Quality (IAQ) is essential when considering the efficiency of a workplace. Studies show that when employees breathe cleaner air, they perform better. An increase in ventilation from 5 cubic feet per minute (cfm) to 20 cfm can boost productivity by 0.25%, translating to significant monetary value. Good IAQ contributes to clear thinking and reduced absenteeism, leading to a more consistent and engaged workforce.

For instance, improved air quality could lead to an estimated productivity value of \(90 per person annually. When looking at a growing company with 120 employees, this seemingly small percentage gain in productivity can result in a considerable aggregate increase of \)10,800 per year. Thus, investing in better IAQ is not just about health - it's a smart financial decision that can yield measurable results in output and efficiency.

Respiratory Illness Reduction

Respiratory illnesses are a significant burden on health systems and a common cause of workplace absenteeism. IAQ can play a crucial role in mitigating these illnesses. By improving ventilation, a company can decrease the prevalence of respiratory issues by 10%, leading to fewer sick days and more consistent employee attendance.

When we translate this into financial terms, \(39 saved per person each year due to reduced respiratory illnesses amounts to a total annual savings of \)4,680 for an organization with 120 employees. This is a remarkable saving, highlighting that investments in IAQ not only foster a healthier working environment but also have a direct positive impact on the economic health of a company.

Ventilation System Economics

The economic implications of enhancing a building's IAQ need careful consideration. While there are upfront costs associated with improving ventilation systems, including equipment and energy costs, these investments have a long-term payoff. If we evaluate the expenditure, an increase in annual energy consumption by \(6 per person, alongside an equipment cost of roughly \)4, implies a total spend of \(1,200 for a company with 120 employees.

Although there's an annual increase in expenses due to enhanced IAQ, the expected benefits in terms of productivity and health cost savings outweigh these costs. This exercise reveals a net monetary benefit of \)13,280 per year for a workplace with 120 employees. Therefore, installing a better IAQ system is not only good for the employees' health but also makes economic sense for the employer. A strategic investment in IAQ technology can, thus, result in tangible returns to the bottom line.