A bank has recently taken over the billing function of a company. An agreement s

Question

A bank has recently taken over the billing function of a company. An agreement stipulates that the bank should process 99.2% of the bills within 4 hours. A study of the current process indicates that the processing time averages 2.2 hours per bill with a standard deviation of 0.8 hours. A process improvement team has suggested a change. Experiments indicate that the change will lower the average processing time to 2 hours, but will raise the standard deviation to 1.2 hours.

a.) With the new system, what is the probability of processing the bills within 4 hours?

b.) With the current system, what is the probability of processing the bills within 4 hours?
c.) Should you change systems

Explanation / Answer

if this change will be implemented then the average processing time will decrease from 2.2 hours to 2 hours bt the problem is that Standard daviation will increase from .8 to 1.2 . According to me standard deviation is use for optimize and modify the process so it should be decrease . Because we calculate the Standard Deviation maybe we can solve a problem much faster by using just your intuition.

This suggsted change will not applied.
A low standard deviation indicates that the data points tend to be very close to the mean, whereas high standard deviation indicates that the data points are spread out over a large range of values.

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