ABC Insurance Company tracks absenteeism by weekly random samples. Based on past experiences, the company expects about 250 employees to be absent from its workforce of 5,000 on the average.
For a variety of financial reasons, the company has eliminated its flex time option for its employees. It has tracked absences over the past fifteen days. The size of each sample is 110. The numbers of absences per sample for the last 15 days are as follows:
Day Number absent
1 5
2 10
3 6
4 7
5 7
6 5
7 8
8 6
9 10
10 10
11 9
12 8
13 7
14 8
15 9
Assume that these 15 days are sufficient to perform this analysis.
a) Construct a 2s control chart for the proportion absent and plot the sample data
points. Base the center line on the historical absentee rate prior to the elimination of the flex time.
b) Has there been a change in the absenteeism rate? Explain why or why not.
c) Suppose the insurance industry's standard for absenteeism is 4% (lower limit) to 8% (upper limit). What would you conclude about ABC's performance compared to the industry standard? Explain.