Problem: Data entry clerks at ARCO key in thousands of insurance records each day. Each day random samples of the work of the clerks were collected. The results are shown in the table below. Two hundred records were sampled daily and examined for errors. The number of records with errors was counted.
|
Day
|
Number of Records with Errors
|
Day
|
Number of Records with Errors
|
|
1
|
12
|
11
|
12
|
|
2
|
10
|
12
|
2
|
|
3
|
0
|
13
|
16
|
|
4
|
2
|
14
|
14
|
|
5
|
8
|
15
|
10
|
|
6
|
4
|
16
|
8
|
|
7
|
10
|
17
|
22
|
|
8
|
6
|
18
|
6
|
|
9
|
6
|
19
|
0
|
|
10
|
4
|
20
|
8
|
a) You want to set control limits for the proportion of records with errors. Using 99.7% control limits, what are the upper and lower control limits for the proportion of records with errors? Calculate your results to 2 decimal places.
b) Plot the control chart and the sample values.
c) What would you conclude about the process, in other words, is the process in control? Explain your decision.
d) Suppose the industry’s lower and upper control limits are 0.04 and 0.08 respectively. What can this insurance company conclude about its process relative to the industry standards?