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Case 1: Drum Costs

© Jostein Lillestøl NHH, Bergen

Drum Costs

Topic: Linear fit Context:

A developer of oil fields makes extensive use of drums of various sizes and

specifications. For project cost estimation they need rough estimates of their costs.

As an alternative to looking at detailed specifications and component costs, they will try out the use of simple characteristics of each drum. The simplest possible is just to use their weights. Corresponding costs (in 1000 $) and weights (in tons) for 8 pumps are given in the file Drum_Costs.XLS.

Task:

Establish a relationship between cost and weight and present the result graphically.

Suggest a possible use of this relationship in the given context practice.

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