FINANCIAL AND TECHNICAL ANALYSIS OF INSURANCE SECTOR WITH GOAL PROGRAMMING MODEL

Betül Zehra Karagül

FINANCIAL AND TECHNICAL ANALYSIS OF INSURANCE SECTOR WITH GOAL PROGRAMMING MODEL

Abstract

In today’s business environment, management decision making in many insurance agencies and banks has become a complex task. Profit maximization or cost minimization are not always the only objects that a firm sets for. For these firms a variety of goals influence the decisions. Goal programming, one of the methods used to solve multi-objective linear programming models, can solve decision problems involving multiple goals. In this paper two different goal programming models are constructed for Turkey’s non-life insurance sector to find an optimal solution with different goals for financial and technical analysis. In the first model five different financial ratios and in the second model four different technical ratios are used. The five years data is considered in these models. All goals which are set in the models are fully achieved. These models can be used as a guideline for insurance companies in their agency management and financial modeling.

Keywords

References

[1] Charnes A., and Cooper W.W., (1961) Management Models and Industrial Applications of Linear Programming, vol. 1 & 2, New York: Wiley.
[2] Ignizio J.P., (1982) Linear Programming in Single & Multiple-Objective Systems, Prentice Hall.
[3] Hassan, N., Mohamed Hamzah, H.H. & Md Zain, S.M., (2013) A goal programming approach for rubber production in Malaysia. American-Eurasian Journal of Sustainable Agriculture, 7(2), 50–53.
[4] Todovic, D., Makajic-Nikolic, D., Kostic-Stankovic, M., & Martic, M., (2015) Police officer scheduling using goal programming, Policing: An International Journal of Police Strategies and Management, Vol. 38, 295-313.
[5] Hassan, N. & Halim B.A., (2012) Mathematical modelling approach to the management of recreational tourism activities at Wetland Putrajaya. Sains Malaysiana, 41 (9), 1155-1161.
[6] Hassan, N. & Sahrin, S., (2012) A mathematical model of nutrient management for pineapple cultivation in Malaysia. Advances in Environmental Biology, 6(5), 1868–1872.
[7] Ataollahi, F., Bahrami, M. A., Abesi, M., & Mobasheri, F., (2013) A goal programming model for reallocation of hospitals' inpatient beds, Middle-East Journal of Scientific Research, 18 (11), 1537-1543.
[8] Wiecek, M.M, Blouin, V.Y., Fadel, M.G., Engau, A., Hunt, B.J., Singh, V., (2008) Multi-scenario multi-objective optimization with applications in engineering design, In: Multiple objective programming and goal programming: theoretical results and practical applications, Barichard, V., Ehrgott, M., Gandibleux, X., T’Kindt, V., (eds). Volume 618, Lecture Notes in Economics and Mathematical System. Springer Verlag, Berlin.

[9] Kommerce, S. M. , Babu, G. R., Madhubala, M., (2011) Goal Programming Model for Transportation Problems, IJCSIT International Journal of Computer Science and Information Technology, Vol. 4, No. 1, pp. 43-48.
[10] Smorts W. L., Spruill., M. L., (1974) Goal Programming and Working Capital Management, Financial Management, 67-74.
[11] Kosmidou K. & Zopounidis, (2002) A multiobjective methodology for bank asset liability management, financial engineering, e-Commerce and supply chain (pp. 139-150). Kluwer Academic Publishers.
[12] Ajibola A., John A. O., and Lezaasi L.T., (2013) Financial Statement Management, Liability Reduction and Asset Accumulation: An Application of Goal Programming Model to a Nigerian Bank, International Journal of Financial Research Vol. 4, No. 4; 2013
[13] Hassan N., & Loon L.L., (2012) Goal programming with utility function for funding allocation of a university library, Applied Mathematical Sciences, 6(110),5487–5493.
[14] Agarana M.C., Bishop S.A., & Odetunmibi O.A., (2014) Optimization of banks loan portfolio management using goal programming technique, International Journal of Research in Applied, Natural, Social Sciences, Vol. 2(8), 43-52.
[15] Mehri M. & Jamshidinavid B., (2015) Designing a mathematical model of asset and liability management using goal programming (Case Study: Eghtesad-e- Novin Bank), GMP Review, Vol. 18(3), 186-195.
[16] Klock D.R., and Lee S.M., (1974) A Note on Decision Models for Insurers, Journal of Risk and Insurance 41, no. 3: 537-43.
[17] Drandell M., (1977) A Resource Association Model for Insurance Management Utilizing Goal Programming, Journal of Risk and Insurance 44, vol. 2: 311-15.
[18] Lawrence K.D., and Reeves G.R., (1982) A Zero-One Goal Programming Model for Capital Budgeting in a Property and Liability Insurance Company, Computers and Operations Research 9, no. 4: 303-9.
[19] Gleason J.M., and Lilly C.C., (1977) A Goal Programming Model for Insurance Agency Management, Decision Sciences 8, no. l : 180-90.
[20] O'leary D., and O'leary J., (1987) A Multiple Goal Approach to the Choice of Pension Fund Management, Advances in Mathematical Programming and Financial Planning, ed. K.D. Lawrence, J.B. Guerard, Jr., and G.R. Reeves. Greenwich, Conn.: Jal Press, Inc., 2, : 187-95.
[21] Heras A., Gil J.A., García-Pineda P., Vilar J.L., (2004) An Application of Linear Programming to Bonus Malus System Design, Astin Bulletin, Volume 34-2,pp.435-456.
[22] Romero, C., (2004) A general structure of achievement function for a goal programming model, Eur. J. Operat. Res. 153 675–686
[23] Balakrishnan, N., Render, B., & Stair, R., (2013) Managerial Decision Modeling with Spreadsheets, 3rd Edition, Prentice Hall.
[24] Jones, D., Merhdad, T., (2010) Practical Goal Programming, Springer.
[25] Charles, H.F., Boaz, G. and Hussein, N., (2005) Modelling Tradeoffs in Three-Dimensional Concurrent Engineering: A Goal Programming Approach, Journal of Operations Management, 23, 389-403.
[26] Schniederjans, M.J. and Kwak, N.K., (1982) An Alternative Method for Solving Goal Programming Problems: A Reply, The Journal of the Operational Research Society, 33, 859-860.
[27] Tamiz, M. and Jones, F., (1997) Interactive Frame Works for Investigating of Goal Programming Models. Theory and Practice, Journal of Multi-Criteria Decision Analysis, 6, 52-60.
[28] Crowder, L.J and Sposito, V.A., (1987) Comments on “An Algorithm for Solving the Linear Goal-Programming Problem by Solving Its Dual”, The Journal of the Operational Research Society, 38, 335-340.
[29] Tamiz, M., Jones, D.F. and El-darzin, E., (1995) A Review of Goal Programming and Its Applications, Annals of operation Research, 58, 39-53.
[30] Brigham, E.F., Houston, J.H., (2001) Fundamentals of Financial Management (9th edition), Orlando, FL, Harcourt College Publishers.
[31] Öner Kaya, E., (2015) The Effects of Firm-Specific Factors on the Profitability of Non-Life Insurance Companies in Turkey, International Journal of Financial Studies, 3(4), 510-529. http://dx.doi.org/10.3390/ijfs3040510
[32] Dorfman, M. S., (2005) Introduction to Risk Management and Insurance(8th ed.), Upper Saddle River, N.J.: Pearson Prentice Hall.
[33] Kaya, O. E., (2016) Financial Performance Assessment of Non-Life Insurance Companies Traded in Borsa Istanbul via Grey Relational Analysis, International Journal of Economics and Finance, 8(4), 277-288.
[34] Kozak, S., (2011) Determinants of Profitability of Non-Life Insurance Companies in Poland during Integration with the European Financial System, Electronic Journal of Polish Agricultural Universities, 14(1).

Details

Primary Language

English

Subjects

-

Journal Section

Research Article

Authors

Betül Zehra Karagül This is me
0000-0002-9964-4521
Türkiye

Publication Date

June 1, 2018

Submission Date

May 18, 2017

Acceptance Date

January 4, 2018

Published in Issue

Year 2018 Volume: 36 Number: 2

IZ

https://izlik.org/JA83ZX87PG

Cite

RIS / Bibtex

APA

Karagül, B. Z. (2018). FINANCIAL AND TECHNICAL ANALYSIS OF INSURANCE SECTOR WITH GOAL PROGRAMMING MODEL. Sigma Journal of Engineering and Natural Sciences, 36(2), 553-561. https://izlik.org/JA83ZX87PG

AMA

1.Karagül BZ. FINANCIAL AND TECHNICAL ANALYSIS OF INSURANCE SECTOR WITH GOAL PROGRAMMING MODEL. SIGMA. 2018;36(2):553-561. https://izlik.org/JA83ZX87PG

Chicago

Karagül, Betül Zehra. 2018. “FINANCIAL AND TECHNICAL ANALYSIS OF INSURANCE SECTOR WITH GOAL PROGRAMMING MODEL”. Sigma Journal of Engineering and Natural Sciences 36 (2): 553-61. https://izlik.org/JA83ZX87PG.

EndNote

Karagül BZ (June 1, 2018) FINANCIAL AND TECHNICAL ANALYSIS OF INSURANCE SECTOR WITH GOAL PROGRAMMING MODEL. Sigma Journal of Engineering and Natural Sciences 36 2 553–561.

IEEE

[1]B. Z. Karagül, “FINANCIAL AND TECHNICAL ANALYSIS OF INSURANCE SECTOR WITH GOAL PROGRAMMING MODEL”, SIGMA, vol. 36, no. 2, pp. 553–561, June 2018, [Online]. Available: https://izlik.org/JA83ZX87PG

ISNAD

Karagül, Betül Zehra. “FINANCIAL AND TECHNICAL ANALYSIS OF INSURANCE SECTOR WITH GOAL PROGRAMMING MODEL”. Sigma Journal of Engineering and Natural Sciences 36/2 (June 1, 2018): 553-561. https://izlik.org/JA83ZX87PG.

JAMA

1.Karagül BZ. FINANCIAL AND TECHNICAL ANALYSIS OF INSURANCE SECTOR WITH GOAL PROGRAMMING MODEL. SIGMA. 2018;36:553–561.

MLA

Karagül, Betül Zehra. “FINANCIAL AND TECHNICAL ANALYSIS OF INSURANCE SECTOR WITH GOAL PROGRAMMING MODEL”. Sigma Journal of Engineering and Natural Sciences, vol. 36, no. 2, June 2018, pp. 553-61, https://izlik.org/JA83ZX87PG.

Vancouver

1.Betül Zehra Karagül. FINANCIAL AND TECHNICAL ANALYSIS OF INSURANCE SECTOR WITH GOAL PROGRAMMING MODEL. SIGMA [Internet]. 2018 Jun. 1;36(2):553-61. Available from: https://izlik.org/JA83ZX87PG