An Analysis of SteelFab's Project Costs and Profits
Abstract
SteelFab is a structural steel fabricator with headquarters in Charlotte, North Carolina. In this study I analyze costs and profits for the firm. In particular, I estimate a cost function for SteelFab projects. I use the cost function to test the effects of project output, project regions and project type on costs. Short-run economies scale seem to exist. Costs increase as input prices increase, all else equal. Costs of new hospitals and specialty buildings are higher than new warehouses at a highly significant level. In light of the cost analysis, I analyzed profits with a focus on project size and project type. The evidence suggests that fabrication and erection of steel for large warehouses is consistently the most profitable type of SteelFab project.