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assign3 - The production manager has complained that some...

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ASSIGNMENT #3 Date Assigned: March 12, 2007 Date Due: March 26, 2007 1. The financial statements of the pension plan for the last three years who the following: 2004 2005 2006 Book Value @ 1/1 $1,000,000 $1,150,000 $1,410,000 Contributions 150,000 180,000 200,000 Interest and dividends 50,000 60,000 70,000 Benefits (20,000) (30,000) (40,000) Fees (10,000) (10,000) (10,000) Realized gains (20,000) 60,000 120,000 Book Value @ 31/12 $1,150,000 $1,410,000 $1,750,000 In addition, market values of the funds were as follows: 1/1/2004 $1,100,000 1/1/2005 1,050,000 1/1/2006 1,500,000 1/1/2007 1,900,000 (i) Derive a four-year moving average value of the fund as at January 1, 2007 based on the method using unit values adjusting appropriately for cash flow. (ii) Derive an actuarial value of assets as at January 1, 2007 using a delayed recognition approach over four years. 2. Anderson – Exercise 5.2.2 3. A manufacturing organization makes extensive use of robots on its assembly lines.
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Unformatted text preview: The production manager has complained that some of the robots wear out within a year or two of acquisition, while others seems to go on forever. He has enlisted your services to address long-range planning difficulties presented by such seemingly random failures. You have observed that the propensity to wear out appears to decay exponentially as the robots survive, and therefore the “force of wear out” is of the form μ t = a e-bt where t is the number of years since “x” purchase and a and b are constants. Further, the production manager has told you that, of 200 newly purchased robots, he expects 50 to wear out in the first year and another 20 in the second year. Calculate the probability of wear-out during each of the first five years. 4. Aitken (Page 47) – Exercises 2-6 and 2-7 (assume the salary increases in accordance with the salary scale)...
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