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How do they come up with these business loss numbers?

Discussion in 'Other Off Topic Forum' started by Slim, Mar 10, 2004.

  1. Slim

    Slim Formula 3

    Oct 11, 2001
    1,735
    Pacifica, CA, USA
    Full Name:
    richard
    I'm not the most informed user here (just ask Airbarton and Tifosi, ha!) but the numbers they quote in the news from loses to things like computer viruses sound crazy to me. How do they come up with this?

    I mean, I can see how a company can say, "we normally process $100k in orders a day but today we spent all day with our computers down and so we 'lost' $100k". But did they lose it? Or will the customers simply call back tomorrow? Or go to a competitor that didn't get the virus this time (and therefore cause no net loss to the economy as a whole)?

    If the business can't be picked up by another US firm, and goes off shore, then yeah, I guess the u.s. econmy lost $X to the virus. But I can't see that happening often enough to come up with the billion dollar numbers they toss out on the news. I know that when I worked at companies that had computer problems, within days I had caught back up on all my work and produced just as much as if it never had happened so...

    What's the scoop?
     
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  3. tjacoby

    tjacoby F1 Rookie

    Nov 1, 2003
    2,856
    Vancouver Canada
    Full Name:
    tj
    the best way - guess. x people at 2 hrs lost productivity @ $40/hr avg (loaded cost) + y tech's at $30/hr to fix at 40hrs/company = $100m without much effort.

    use whatever math you'd like, it's all as valid as the next guy's guess. What point do you want to make basically.

    Every company has this problem, the difference between soft and hard dollars. Hard dollars are easy to measure, it's cheques being cut, but soft dollars are tough.

    the accountants on the group can speak to it much more accurately than I.
     
  4. Slim

    Slim Formula 3

    Oct 11, 2001
    1,735
    Pacifica, CA, USA
    Full Name:
    richard
    Well, I see how *one company* may lose some productivity, sales, whatever, and have to hire some techs to fix the computers and whatnot.

    But the customers still had to buy their goods somewhere, right? They either just waited and bought from the same company once back up to speed, or they bought from someone else. If so, I can't find any net loss to the U.S. economy. The money they paid the techs didn't leave the economy either.

    As far as manufacturing goes, I suspect every factory could close down for a whole week and easily still produce the same output they had planned for the year, therefore losing nothing (they may have paid some overtime pay to catch up, but that money didn't leave the economy).

    So when they say "computer viruses cost U.S. companies $Xbil a year," are they just counting the loses without offsetting it in the gains (business gained by non-infected companies who snagged customers from the infected companies, the tech guys, etc.)?
     

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