1) You are a workers compensation claims analyst working for alarge manufacturin

1) You are a workers compensation claims analyst working for alarge manufacturing organization (workers compensation is a workerinjury protection; it pays medical and other expenses for workerswho were injured onthe job). A key part of yourresponsibilities is to reserve a certain amount of funds for eachworkers compensation claim you process which is necessary formaking sure that each injury claim has adequate funds to pay itscosts. This requires you to forecast or estimate the expectedfuture cost of each claim which is both time-consuming anddifficult as there are multiple factors (such as the nature ofinjury workers age the nature of accident etc.) that determinethe ultimate cost of individual claims. Having a lot ofhistorical data (past claims) you decide to use regressionanalysis to help you forecast the expected cost of the individualworkers compensation claims.