Executive Summary
The settlement from the insurance company was more than reasonable. The mean estimate excess cost of operations was roughly $254,000 but that is just the mean estimate. Unfortunately for Krog’s MetalFab Inc. we have zero confidence in this model’s exact mean estimate of $254,000. We are 95% confident that the estimated excess costs of operation was between roughly $9,600 using the lower 95% and almost $500,000 using the upper 95%. Because of this, the insurance company should have not immediately settled for $254,000 and should have only offered $9,600 as their starting settlement offer. Krog’s got a very good deal here.
The way that I figured out these numbers is by creating a regression to estimate the materials, labor, overhead, and I also created a model for overall cost estimation. The materials regression is a mixed cost model meaning that there are some fixed costs that we have but also have some variables costs that we are able to control based......

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Title: Krog's Metalfab
Approximate Word Count: 568
Approximate Pages: 3 (250 words per double-spaced page)

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