QFD approach using neural nets

Abstract

The purpose of the study is to identify the critical parameters and to investigate the sustainability of the social security system in Turkey considering the recently introduced social security reform, Act No. 4447. The current PAYG type pension plan accommodating SSK insureds covered by Act No. 506 which constitutes the major segment of the entire social security system in Turkey, is investigated with a deterministic model that operates with basic engineering economics methods. The model is run for different system parameters and for different scenarios while the model results are generated in terms of the Net Present Value (NPV) of yearly cash flows projected for the period 2000 to 2050 and 2000 to 2120. Retirement eligibility regulations and pension calculations arising from Act No. 4447 are utilised in the model. In addition to the projections made for the total system, the sustainability of the newly introduced regulations is tested by assuming a newly initiated system with no previous liabilities.Possible portfolio compositions that can produce the real returns required by the developed model are investigated. Different portfolios are generated by using the Markowitz model based on past 11 year performance of four financial instruments in Turkey.