Iran Occupational Health

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Background and aim: These accidents have brought great losses for the community, organization and workers and Now the worst consequence of occupational accidents is the premature mortality of labor force. In developing and developed countries occupational accidents are one of the major problems, The most important part of these costs are human costs. Deaths caused by occupational accidents reasult in the loss of life, years of work and related costs. Every year, millions of occupational accidents occurs worldwide some of the accidents  are fatal and others leads to temporary and permanent inability.
The HSE-MS is a regular, systematic and explicit approach, accomplished with the comprehensive processes with the goal of planning, documentation and changing the methods in order to manage the detrimental factors, safe the threats and risk analysis. Like the other management systems, the HSE-MS system is developed in order to obtain a healthy working environment with the minimum amount of job related incidents and dangers. A notable point is that the implementation of HSE-MS management system requires spending the money and time.
Investment is one of the most important topics for converting funds into assets. Knowing whether an investment is ultimately profitable or not is the most important part of an investment. A sharp decline in the cost benefit of a poor work environment can undermine the economic systems of society and subsequently jeopardize the position of the system in a competitive world. Today, with the development of industries and the ever-advancing technology, we are faced with complications such as air pollution, work-related accidents and occupational diseases that have made the need to implement HSE-MS management in various projects a necessity. To ensure the justification of economic valuation methods, we used four classical IRR, MIRR, AIRR, and NPV methods to compare and evaluate the best economic valuation method.
Methods: For this study, we have calculated the profitability of the HSE-MS system implementation by defining the values ​​of the financial process flow in terms of fuzzy numbers and by using the IRR method including classical IRR, MIRR, AIRR and NPV methods. Finally, the validity of the results was analyzed using @RISK software and vertex method.
Step 1: Study theory
1: calculate the accident costs based on fuzzy values, before and after the HSE-MS system implementation. It is worthy to be noted that in this step can be used expert’s opinions, the historical data and existed information of similar projects. Actually, in this stage, first the cash flow stream of Costs arising from accidents is estimated before the HSE-MS system implementation. Then the cash flow stream value of Costs arising from accidents is estimated after the HSE-MS system implementation.
2: Calculate the income value of HSE-MS system implementation by differing the cash flow stream values of Costs arising from accidents before and after the HSE-MS system implementation.
3: Estimate the amount of investment required to implement the HSE-MS system.
4: Form the final cash flow stream obtained from the implementation of HSE-MS system. It can be obtained by summing the income and investment cash flow streams values.
5: Calculate the profitability of the final cash flow obtained from HSE-MS system implementation using the strict exceedance possibility method.
Step 2: Operational calculation and analysis of accident costs
accidents are classified into 5 groups according to the intensity of the result of an accident i.e.: 1. Short-term absences, 2. Long-term absence, 3. Small disability, 4. Total disability and 5. Death and based on borne costs in six groups including; 1. Production disturbance costs, 2. Human Capital Costs, 3. Medical costs, 4. Administrative costs 5. Transfer costs and 6. Other costs classified according to the direct or indirect costs resulting from the incident and impose costs on workers, employers and society.
Step 3: Economic evaluation and analysis of four methods classic IRR, AIRR, MIRR and NPV

Internal Rate of Return (IRR)

The internal rate of return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments. The internal rate of return is a discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero. IRR calculations rely on the same formula as NPV does.

Formula and Calculation for IRR

Modified internal rate of return (MIRR)

Modified Internal Rate of Return (MIRR) considers cost of capital, and is intended to provide a better indication of a project's probable return. It applies a discount rate for borrowing cash, and the IRR is calculated for the investment cash flows. When a project has multiple IRRs it may be more convenient to compute the IRR of the project with the benefits reinvested. Accordingly, MIRR is used, which has an assumed reinvestment rate, usually equal to the project's cost of capital.   Formula and Calculation for MIRR 
Average internal rate of return (AIRR)
researcher introduced a new approach, named AIRR approach, based on the intuitive notion of mean, that solves the problems of the IRR . However, the above-mentioned difficulties are only some of the many flaws incurred by the IRR.

Formula and Calculation for AIRR

@RISK Software
@RISK is an add-in to Microsoft Excel that lets you analyze risk using Monte Carlo simulation. @RISK shows you virtually all possible outcomes for any situation—and tells you how likely they are to occur. This means you can judge which risks to take on and which ones to avoid—critical insight in today’s uncertain world. @RISK identifies and ranks the most important factors driving your risks, so you can plan strategies—and resources—accordingly.
Results: The average rate of return on the internal financial capital of the financial process resulting from the implementation of the HSE-MS management system in accordance with the classic IRR, AIRR and MIRR methods is 22.23, 18.11 and 11.12%, respectively, which is 5% higher than the average market rate. The results show that in the MIRR method, the lowest and highest value of the classical IRR obtained is 5.69% and 10.02%, respectively. Also, in AIRR method, the lowest and highest value of classical IRR obtained is equal to 12.44 and 17.55%, respectively. According to the information obtained in the NPV method, the minimum and maximum amount of NPV obtained is equal to 144.7 and $ 3,157,997, respectively. All of which exceed the market value and indicate that the HSE management system is economical. Has been and strongly emphasizes the economics of this financial process. There is no significant difference between the traditional method of calculating classic IRR, AIRR and MIRR with the @RISK software methods, but the difference in the degree of economics in classical IRR methods to AIRR and MIRR is due to the new computational process and the impact of financial variables and time value of money. In other words, the profitability percentages are more acceptable in the newer method.
Conclusion: Today, industries high developments and increasing the amount of incident related costs, in different projects, force the companies to implement a HSE-MS system. However, some managers are hesitated to applying this system, completely, because of different reasons. This paper develops a new method in order to show that this system not only is not a costly project, but also increases the project profitability by decreasing the incident related costs. Actually the HSE-MS system implementation is an economical project. The proposed method in this paper first develops a model for calculation of incident related costs, before and after the incident related costs being occurred. The difference of these two financial processes shows the revenue of the HSE-MS system implementation. Then the ultimate financial process is formed by integrating two revenues and required investment, for the HSE-MS implementation system, financial processes. In order to evaluate the economic assessment of the financial process for a HSE-MS system implementation, the IRR method which is one of the attractive methods, is used. Using this method, by defining the financial process values based on different time periods and considering the time value of money, the attractiveness of financial processes is evaluated. Because of existing uncertainty in predicting of financial process values and also in order to decrease the ultimate risk of the solution, all values of financial process flows are defined as fuzzy numbers. It is worthy to be noted that, whenever, the financial process values are defined like this, the IRR value is also obtained as a fuzzy number. In this paper, a method has been proposed based on the existing techniques in fuzzy sets theories, by which the FIRR value can be computed by a higher reliability level. The economic evaluation of the HSE-MS system is performed using the greater possibility index. Based on the obtained results, the HSE-MS system implementation is strictly advisable because of its benefits. The results show that all four methods were highly economical and contribute to the economic growth of the system in addition to maintaining the original budget. The four methods of economic evaluation introduced have the ability to evaluate each other in terms of the accuracy of the results. On the other hand, the classical IRR method with respect to the data asserts the first letter among the proposed methods and confirms the validity of the HSE_MS system.

Keywords: HSE Management System, Internal Rate Return, @RISK Software

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