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Error in Calculation of Costs and Benefits [Quant & Judgement]

Hey,

I just wanted to remark, that this case has en error in calculating the total costs of the conformity assessment. If you multiply the existing 2,457,000 high risk HR systems with the $200,000 of costs per audit per system it results in total costs of 491,4 B$.
Since 491,4 B$ is greater than the potential 1 B$ of costs to the economy, it is a no-brainer to advise against the implementation of the mandatory conformity assessment.
The rest of the reasoning provided in the case solution remains true and consistent, despite this calculation error.

Cheers

3 Answers
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Top answer
Ian
Coach
on Jan 10, 2024
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate

Hey Marvin,

Appreciate you flagging this! Also, just a note that with 3.3 stars it's likely this case has a few errors/isn't great. Not a bad idea to stick with higher rated cases :)

on Feb 21, 2024
PrepLounge

Hello Marvin,

Thank you for your question about the case and for pointing out an error to us. 

The author has now corrected the case. Feel free to look at it again.

 I wish you much success with your further preparation. 

Kind regards, 

Your PrepLounge team

10
on Jan 10, 2024
#1 rated MBB & McKinsey Coach

Hi Marvin,

Yes, this happens sometimes with cases. Good for you to note it - this way the author can make the necessary adjustments. 

Best,
Cristian

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