Related questions with answers

Explain how the principle of separation of duties is violated in each of the following situations. Also, suggest one or more procedures to reduce the risk and exposure highlighted in each example.

h. An insurance claims adjuster had check-signing authority of up to $6,000. The adjuster created three businesses that billed the insurance company for work not performed on valid claims. The adjuster wrote and signed checks to pay for the invoices, none of which exceeded$6,000.

Glen Smith contracted with Dave Watson, a common carrier, to transport $720$ hives of live bees along with associated equipment from Idabel, Oklahoma, to Mandan, North Dakota. At $9:00$ A.M. on May $24, 1984$ , while en route, Watson's truck skidded off the road and tipped over, severely damaging the cargo. Watson notified Smith about what had happened, and Smith immediately set out for the scene of the accident. He arrived at 6:00 P.M. with two bee experts and a Bobcat loader. They were hindered by the turned-over truck on top of the cargo, and they determined that they could not safely salvage the cargo that evening. The next day, an insurance adjuster determined that the cargo was a total loss. The adjuster directed a bee expert, Dr. Moffat, to conduct the cleanup; Moffat was allowed to keep the salvageable cargo, valued at $\$ 12,326$ , as compensation. Smith sued Watson for damages. Watson denied liability and further contended that Smith failed to mitigate damages. Decide.

An insurance company is hiring for two positions: an actuary and a claims adjuster. How many ways can these positions be filled if there are 9 people applying for the actuarial position and 15 people applying for the claims adjuster position?

Question

The mishandling of a shipping container loaded with 750 cases of wine caused some of the bottles to break. An insurance adjuster proposed to settle the claim at $20.8 \%$ of the value of the shipment. based on a random 250-bottle sample in which 52 were cracked or broken. Calculate

(a) the relative standard deviation of the adjuster's evaluation.

(b) the absolute standard deviation for the 750 cases (12 bottles per case).

(c) the $90 \%$ confidence interval for the total number of bottles,

(d) the size of a random sampling needed for a relative standard deviation of $5.0 \%$ , assuming a breakage rate of about $21 \%$ .

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Solution A

Solution B

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750 wine bottle cases were mishandled by a shipping company and some of the bottles broke. The insurance company offered to settle the claim at 20.8% of the value of the shipment. The probability of the bottles to break is 52 of a 250 random wine bottles sample.