1. An insurance company has a particular type of insurance policy which costs $100 for six months of [url removed, login to view] probability of a claim being filed per policy and month is 0.01. Given that the claim is filed, the size follows a triangular distribution with minimum value $50, most likely value $200 and maximum value $500.
Assume independence in the filling of claims between policies and for month to month.
Develop and run an ARENA model to estimate the average profit and the probability of loss per policy.
2. Solve problem 1 on MS-Excel. Compare the results of the solutions of problems 1 and 2.