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Mathematics Goes to the Movies
by Burkard Polster and Marty Ross
Class Action (1991)
SHE: Why didn’t you just change the blinker circuit? It’s just a question.
ENGINEER: I told Flannery about the problem, a month or so before he died (?). He called in his head bean counter.
SHE: What’s a bean counter?
MICHAEL: Risk management expert, right George?
ENGINEER: Yeah. So, Flannery shows him the data and asks him how much it would cost to retrofit…
SHE: You mean recall
ENGINEER: You got it… to retrofit 175,000 units. You multiply that times 300 bucks a car, give or take, you are looking at around 50 million dollars. So, the risk guy, he crunches the numbers some more. He figures out you’ll have one of those fireball collisions about every 3000 cars. That is 158 explosions.
SHE: Which is almost exactly as many plaintives as there are.
ENGINEER: Those guys know their numbers. So, you multiply that times 200,000 dollars per law suit, that’s assuming everybody sues and wins, 30 million max. See, it’s cheaper to deal with the law suits than it is to fix the blinker. That’s what the bean counters call a simple actuarial analysis.