The Money Pit Mortgage Company is interested in monitoring the performance of th

Question

The Money Pit Mortgage Company is interested in monitoring the performance of the mortgage process. Fifteen samples of five completed mortgage transactions each were taken during a period when the process was believed to be in control. The tmes to complete the transactions were measured. The Money Pit Mortgage Company made some changes to the process and undertook a process capability study. The following data were obtained for 15 samples of size 5. Based on the individual observations, management estimated the process standard deviation to be 4.16 (days) for use in the process capability analysis. The lower and upper specification limits (in days) for the mortgage process times were 8 and 24 ..11 14101.TTTTTTT, t. 16-12 Sample 1 345 6789 1011 1 13 14 15 12 14 10 18 15 14 19 18 15 16 18 17 16 11 Range 11 14 5 12 1 10 9 16 15 12 6 713 11 12 a. Calculate the procoss capability index and the process capability ratio values. The process capability index Op(Enter your response rounded to three decimal places,) The process capability ratio Cp(Enter your response rounded to three decimal places)

Explanation / Answer

Average of Mean (X) = (12+14+10+..........................+16+11)/15 = 224/15 = 14.93

sigma = Standard deviation = 4.16

UCL = 24

LCL = 8

Cpk = Min((UCL-X)/(3*sigma), (X-LCL)/(3*sigma))

Cpk = Min((24-14.93)/(3*4.16), (14.93-8)/(3*4.16)) = Min(0.727, 0.555) = 0.555

Cp = (UCL-LCL)/(6*sigma) = (24-8)/(6*4.16) = 0.641

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